True$/$False #$1$: The questions below cover everything from the Time Value module that will be on the exam, so all I need to do is study these questions. True$/$False #$2$: The exam may contain questions related to any of the material in the Time Value Module, which would include: all of the slides, handouts, and material presented in class. Question $1.$ Sally & Beth both want to retire $12$ years from now. Today, Sally has savings of $$250,000$ and Beth has savings of $$678,000.$ Beth will not save any more money over the next $12$ years. If they both earn $9\%$ per year on their savings over the next $12$ years, how much will Sally have to save per year to have the same amount as Beth $12$ years from now? Question $2.$ You borrow $$122,000$ today. The loan will be repaid in annual payments over $10$ years. If the interest rate on the loan is $9\%,$ what is the amount of principal in the third payment? Question $3.$ You borrowed $$160,000$ for $30$ years at an interest rate of $9\%$ APR. The loan is repaid in monthly payments. Twelve years later, you decide to pay off the loan. What will be the outstanding balance of the loan at the end of $12$ years? Question $4.$ A bank offers you the following: If you pay the bank $$500$ each year for the next $15$ years, after that the bank will pay you $$800$ each year for $20$ years. The interest rate is $10\%.$ Explain, using numbers, why this is or is not a good deal for you. Writing only YES or NO will not receive any credit. Question $5.$ You buy a $3-$month $($one quarter$)$ CD $($certificate of Deposit$)$ for $$960\mathrm{.}53\mathrm{.}3$ months later, the $CD$ pays you $$1,000\mathrm{.}00.$ What is the effective annual rate $($EAR$)$ on this investment? Question $6.$ What is the APR if the EAR is $15\mathrm{.}25\%$ and interest is compounded quarterly? Question $7.$ You want to buy a car $9$ years from now. You estimate the car will cost $$48,000$ at that time. How much would you have to deposit today to have enough to buy the car if interest rates are $10\%?$ Question $8.$ You want to buy a car $9$ years from now. You estimate the car will cost $$48,000$ at that time. How much would you have to deposit each year $($starting one year from now$)$ to have enough to buy the car if interest rates are $10\%?$