1. You are borrowing $19,800 to buy a car. The terms of the loan call for monthly...
Question:
1. You are borrowing $19,800 to buy a car. The terms of the loan call for monthly payments for five years at 4.35 percent interest. What is the amount of each payment?
A. $591.40
B. $484.64
C. $402.19
D. $323.33
E. $367.78
2. You are borrowing $18,800 to buy a car. The terms of the loan call for monthly payments for five years at 4.25 percent interest. What is the amount of each payment?
A. $348.36
B. $402.19
C. $313.33
D. $391.40
E. $444.64
3. You are given that the present value of the cash flows shown in the table below is $45,000. What is the amount of the missing cash flow, given a discount rate of 6 percent?
End of Year | Cash Flow |
1 | $15,000 |
2 | $15,000 |
3 | ????? |
4 | $15,000 |
A. $0
B. $11,309
C. $8,700
D. $6,691
E. $7,643
4. You are scheduled to receive $30,000 a year for twenty years beginning one year from today. You prefer to receive one lump sum amount of money twenty years from today, instead of the yearly payments. How much should this lump sum amount be if the appropriate interest rate is 6 percent?
A. $851,414
B. $1,339,381
C. $1,247,209
D. $1,103,568
E. $938,909
5. You are scheduled to receive $30,000 two years from today. When you receive it, you will invest it for 5more years, at 6 percent per year. How much money will you have 7 years from now?
A. $40,146.77
B. $51,414.73
C. $38,909.19
D. $39,381.16
E. $47,209.19
6. You borrow $250,000 to buy a home. The terms of the loan are as follows: 30-year mortgage loan at a rate of 4.50 percent with monthly payments. What percentage of your first month's payment goes toward interest?
A. 67 percent
B. 74 percent
C. 58 percent
D. 89 percent
E. 43 percent
7. You borrow $70,000 and arrange to pay off the loan in five equal annual installments. Payments will be made at the end of each year. The loan interest rate is 7.50 percent. What percentage of your second year's payment will go toward interest?
A. 80.5 percent
B. 25.1 percent
C. 17.2 percent
D. 28.7 percent
E. 19.5 percent
8. You just purchased your first home for $135,000. As a first time home buyer, you took advantage of a government program that allowed you to put zero down. The interest rate on your fifteen-year mortgage is 3.25 percent. Assuming you make all your monthly payments on time, what will be your mortgage balance after exactly eight years of payments?
A. $77,827
B. $80,095
C. $86,412
D. $71,183
9. You just received $185,000 from an insurance settlement. You have decided to set this money aside and invest it for your retirement. Currently, your goal is to retire 25 years from today. How much more will you have in your account on the day you retire if you can earn an annual return of 10.5 percent rather than just 8 percent?
A. $532,971
B. $1,189,576
C. $708,756
D. $978,096
E. $2,254,630
10. You just received $225,000 from an insurance settlement. You have decided to set this money aside and invest it for your retirement. Currently, your goal is to retire 30 years from today. How much more will you have in your account on the day you retire if you can earn an annual return of 11 percent rather than just 7 percent?
A. $2,254,630
B. $3,438,009
C. $1,189,576
D. $988,717
E. $708,756
Engineering Economy
ISBN: 978-0132554909
15th edition
Authors: William G. Sullivan, Elin M. Wicks, C. Patrick Koelling