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PMT   Question 1     You have accumulated $1,345,320 for your retirement

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Question 1

You have accumulated $1,345,320 for your retirement. How much money can you withdraw for the next 26 years in equal annual end-of-the-year cash flows if you invest the money at a rate of 12.56 percent per year, compounded annually?

Round the answer to two decimal places.

Question 2

John plans to buy a vacation home in 3 years from now and wants to have saved $88,949 for a down payment. How much money should he place today in a saving account that earns 9.95 percent per year (compounded daily) to accumulate money for his down payment? Round the answer to two decimal places

Question 3

You have been offered the opportunity to invest in a project that will pay $5,771 per year at the end of years one through three and $10,278 per year at the end of years four and five. If the appropriate discount rate is 5.8 percent per year, what is the present value of this cash flow pattern?

Round the answer to two decimal places.

Question 4

Large-cap stocks had the nominal rates of return of 9.52 percent. The rate of inflation during the last year was 3.34 percent. What is the real rate of return for large-cap stocks?

Round the answer to two decimal places in percentage form. (Write the percentage sign in the "units" box)

Question 5

You plan to buy a house in 7 years. You want to save money for a down payment on the new house. You are able to place $471 every month at the end of the month into a savings account at an annual rate of 11.14 percent, compounded monthly. How much money will be in the account after you made the last payment? 

Round the answer to two decimal places.

Question 6

Cooling Tools, Inc. is currently producing 577 of small refrigerators per month but the company’s CEO plans to increase production at a rate of 11.15 percent per month until the firm is producing 6,951 of refrigerators per month. How many months will this take?

Round the answer to two decimal places.

Question 7

You have accumulated some money for your retirement. You are going to withdraw $97,990 every year at the beginning of the year for the next 22 years starting from today. How much money have you accumulated for your retirement? Your account pays you 14.91 percent per year, compounded annually. To answer this question, you have to find the present value of these cash flows.

Round the answer to two decimal places.

Question 8

You have accumulated some money for your retirement. You are going to withdraw $55,721 every year at the end of the year for the next 16 years. How much money have you accumulated for your retirement? Your account pays you 10.36 percent per year, compounded annually. To answer this question, you have to find the present value of these cash flows.

Round the answer to two decimal places.

Question 9

A firm's dividends have grown over the last several years. 9 years ago the firm paid a dividend of $2. Yesterday it paid a dividend of $7. What was the average annual growth rate of dividends for this firm?

Round the answer to two decimal places in percentage form. (Write the percentage sign in the "units" box)

Question 10

For the next 12 years, you decide to place $3,025 in equal year-end deposits into a savings account earning 4.93 percent per year. How much money will be in the account at the end of that time period? 

Round the answer to two decimal places.

Question 11

You placed $2,901 in a savings account today that earns an annual interest rate of 11 percent compounded annually. How much you will have in this account at the end of 38 years? Assume that all interest received at the end of the year is reinvested the next year.

Round the answer to two decimal places.

Question 12

What is the present value of a $220 perpetuity discounted back to the present at 6.08 percent.

The answer should be calculated to decimal places.

Question 13

What is the present value of the following annuity?
$2,765 every quarter year at the end of the quarter for the next 13 years, discounted back to the present at 16.92 percent per year, compounded quarterly?

Round the answer to two decimal places.

Question 14

You plan to apply for a loan from Bank of America. The nominal annual interest rate for this loan is 10.49 percent, compounded daily (with a 365-day year). What is the effective annual rate, or EAR (annual percentage yield), of this loan?

Round the answer to two decimal places in percentage form. (Write the percentage sign in the "units" box)

Question 15

A commercial bank will loan you $52,207 for 7 years to buy a car. The loan must be repaid in equal monthly payments at the end of the month. The annual interest rate on the loan is 19.21 percent of the unpaid balance. What is the amount of the monthly payments?

Round the answer to two decimal places.