1.If you are indifferent between receiving $100 today and receiving $120 two years later, your required annual rate of return must be close to:

1

5.5 percent.

20 percent.

6.5 percent.

9.5 percent.

2.You have just arranged for a $200,000 mortgage to finance the purchase of a house. The mortgage has an 8 percent quoted rate, interest is compounded semi-annually and it calls for monthly payments for the next 20 years.What is the monthly payment?

$1,656.72

$2,782.51

$10,104.70

$1,672.88