fin300 practice
1.
Poor Dog, Inc. borrowed $135,000 from the bank today. They must repay this money over the next six years by making monthly payments of $2,215.10. What is the interest rate on the loan? Express your answer with annual compounding.
A)
5.98%
B)
6.63%
C)
4.71%
D)
5.65%
E)
5.80%
2.
How much would you pay for a security that pays you $500 every 4 months for the next 10 years if you require a return of 8% per year compounded monthly?
A)
$11,228.48
B)
$15,000.00
C)
$10,260.00
D)
$13,724.90
E)
$10,200.23
3.
You can earn 5% per year compounded annually for the next 4 years, followed by 8% per year compounded quarterly for 5 years. What is the average annual compounded rate of return over the 9 year period? Express your answer with monthly compounding.
A)
B)
6.82%
C)
6.97%
D)
6.43%
E)
6.59%
4.
You have just purchased a house for $540,000 with a $200,000 down payment. You are going to get a mortgage at the TF bank for the balance. TF is charging a rate of 5.8% per year compounded semi-annually on 5 year term mortgages. You want to make weekly payments amortized over 20 years. What is your weekly payment?
A)
$877.60
B)
$549.01
C)
$545.47
D)
E)
$871.92
5.
Master Meter is planning on constructing a new $20 million facility. The company plans to pay 20% of the cost in cash and finance the balance. How much will each monthly loan payment be if they can borrow the necessary funds for 30 years at 9% per year compounded semi-annually?
A)
$128,740
B)
$158,567
C)
$160,925
D)
$141,982
E)
$126,853
6.
Gerry Industries has some 8% (per year compounded semi-annually) coupon bonds on the market that are selling at $989, pay interest semi-annually, and mature in fifteen years. The company would like to issue $1 million in new fifteen-year bonds. What coupon rate should be applied to the new bonds if Gerry Industries wants to sell them at par? Express your answer with semi-annual compounding.
A)
Poor Dog, Inc. borrowed $135,000 from the bank today. They must repay this money over the next six years by making monthly payments of $2,215.10. What is the interest rate on the loan? Express your answer with annual compounding.
A)
5.98%
B)
6.63%
C)
4.71%
D)
5.65%
E)
5.80%
2.
How much would you pay for a security that pays you $500 every 4 months for the next 10 years if you require a return of 8% per year compounded monthly?
A)
$11,228.48
B)
$15,000.00
C)
$10,260.00
D)
$13,724.90
E)
$10,200.23
3.
You can earn 5% per year compounded annually for the next 4 years, followed by 8% per year compounded quarterly for 5 years. What is the average annual compounded rate of return over the 9 year period? Express your answer with monthly compounding.
A)
B)
6.82%
C)
6.97%
D)
6.43%
E)
6.59%
4.
You have just purchased a house for $540,000 with a $200,000 down payment. You are going to get a mortgage at the TF bank for the balance. TF is charging a rate of 5.8% per year compounded semi-annually on 5 year term mortgages. You want to make weekly payments amortized over 20 years. What is your weekly payment?
A)
$877.60
B)
$549.01
C)
$545.47
D)
E)
$871.92
5.
Master Meter is planning on constructing a new $20 million facility. The company plans to pay 20% of the cost in cash and finance the balance. How much will each monthly loan payment be if they can borrow the necessary funds for 30 years at 9% per year compounded semi-annually?
A)
$128,740
B)
$158,567
C)
$160,925
D)
$141,982
E)
$126,853
6.
Gerry Industries has some 8% (per year compounded semi-annually) coupon bonds on the market that are selling at $989, pay interest semi-annually, and mature in fifteen years. The company would like to issue $1 million in new fifteen-year bonds. What coupon rate should be applied to the new bonds if Gerry Industries wants to sell them at par? Express your answer with semi-annual compounding.
A)