Question 1 (1 point) Saved What is the total future value six years from now of $50 received in one year, $200 received in two years, and $800 received in six years if the discount rate is 8%? () $1,050.00 () $1,047.93 ) $1,145.56 ) $1,237.21 (1) $1,269.15 Question 2 (1 point) The Home Improvement Center (HIC) has an employment contract with the newly hired CEQ. The contract requires a lump sum payment of $32.4 million be paid to the CEO upon the successful completion of her first five years of service. HIC wants to set aside an equal amount of money at the end of each year to cover this anticipated cash outflow and will earn 7.25% on the funds. How much must HIC set aside each year for this purpose? () $5,227,064 () $5,606,026 () $5,668,987 O $6,778,958 : $7,270,433 Question 3 (1 point) Calculate the present value of a growing annuity given the following information: annual cash flows = $60,000; cash flow growth rate = 2%; required rate of return = 7%; timeframe = 10 years. ) $456,390 Question 4 (1 point) A loan where the borrower pays interest each period, and repays some or all of the principal of the loan over time is called a(n) loan. ) Amortized. p "\\,_ :' Continuous. J () Balloon. &) () Pure discount. () Interest-only. Question 5 (1 point) Calculate the present value of a growing annuity given the following information: annual cash flows = $400,000; cash flow growth rate = 2%; required rate of return = 11%; timeframe = 30 years. :j $4,492,776 () $4,392776 $4,292,776 $4,192,776 () $4,092,776 Question 6 (1 point) What is the effective annual rate of 9.75% compounded continuously? ()9.99% () 10.11% uuestion /7 (1 point) You just won the lottery! As your prize you will receive $1,200 a month for 100 months. If you can earn 8% on your money, what is this prize worth to you today? ) $87,003.69 $87,380.23 O $90,723.76 Question 8 (1 point) Beatrice has a credit card that applies interest every month to her account balance. In this case, Beatrice is paying an interest rate that: ":} Equals the rate stated on her billing statement as the APR. ('\\} Is equal to the APR compounded continuously. () Is greater than the APR shown on her billing statement. () Is equal to the annual percentage rate as required by the government. () Will decline automatically as her account balance declines. Question 9 (1 point) To compare interest rates offered by various financial institutions, you should compare the: ) Quoted rates. () Annual percentage rates. () Stated annual rates. :: Nominal rates. :: Effective annual rates. Question 10 (1 point) Which one of the following is correct concerning the annual percentage rate (APR)? ) The APR is greater than the effective annual rate. The APR formula for rate disclosure is [1 + (r/m)]-1. The APR is the rate which lenders are required to disclose. The APR is best used to compare offers from various lenders. O The APR considers all the effects of compounding