14. Five years from now you will begin to receive cash flows of 575 per year. The cash flows will continue forever. If the discount rate is 6%, what is the preser value of these cash flows? A) $699.68 B) $ 794.22 C) $834.07 D) $990.12 E) $1.204.67 15. Your parents agree to pay half of the purchase price of a new car when you graduate from college. You will graduate and buy the car two years from now. You have $6,000 to invest today and can eam 10% on invested funds. If your parents match the amount of money you have in two years, what is the maximum you can spend on the new car? A) S 7.260 B) $11.948 C) $12.000 D) $13,250 E) $14.520 16. The National Bank offers personal loans at 8 percent compounded monthly. The Global Bank offers similar loans at 8.25 percent compounded quarterly. Which one of the following statements is correct concerning these two banks? A). The National Bank loan has an effective rate of 8.27 percent. B). The National Bank loan has an effective rate of 8.33 percent. C). The National Bank loan has a higher effective rate than the Global Bank loan. D). The Global Bank loan has an effective rate of 8.30 percent E). The Global Bank loan has an effective rate of 8.51 percent. 17. A loan that compounds interest monthly has an APR of 13.8 percent. What is the EAR? A). 13.00 percent B). 13.14 percent C). 14.53 percent D). 14.71 percent E). 14.99 percent 18. A bond has a $1,000 face value, a market price of S1,115, and pays interest payments of $90 every year. What is the coupon rate? A) 4.50 percent B) 6.75 percent C) 7.39 percent D) 8.25 percent E) 9.00 percent