You win the Cyclone Sweepstakes and are promised $100 every six months for the next five years, what is the value of your winnings today if the interest rate is 8% per year compounded semi-annually? 8. a. $642.08 b. $719.34 c. $767.52 d. $811.09 9. When you were born, your dear old Aunt Minnie promised to deposit $1,000 into a savings account bearing 5% per year on each birthday, beginning with your first. You have just turned 22 and want the dough. However, it turns out that dear old (forgetful) Aunt Minnie made no deposits on your fifth and your eleventh birthdays. How much is in the account right now? a. S34,503 b. $43,888 c. $47,983 d. $51,889 10. Vito Corleone will loan you money on a "five for six" arrangement, i.e. for every $5 he gives you today, you give him $6 one month from now. What is the EAR of this loan? a. b. ?. d. 240% 436% 618% 792% 11. In order to help you through college, your parents just deposited S25.000 into a bank paying 8% interest. You plan to withdraw equal amounts at the end of each of the next four years. What is the most you can withdraw annually? a. $6,988.91 b. $7,133.84 c. $7,548.02 d. $8,154.71 12. Which of the following is NOT a true statement? a. b. c. d. Compounding essentially means earning interest on interest Future values increase with increases in interest rates Present values and interest rates move in opposite directions from one another On monthly compounded loans, the APR will exceed the EAR