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University of North Georgia, Dahlonega FINC 3440 Exam 7 1)If the discount rate is 12

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University of North Georgia, Dahlonega

FINC 3440

Exam 7

1)If the discount rate is 12.4% per year, what is the present value of $450 to be received in seven years?

2. If the interest rate is 13.7% per year, how many years are required for $45 to increase to $213?

3. What is the present value of an ordinary annuity that pays $300 annually for six years if the discount rate is 7.9% per year?
4. If the future value of an ordinary annuity that pays $1,783.96 each year for ten years is

$25,000.00, what is the annual interest rate?

5. If you borrow $260,000 for thirty years to buy a house at an interest rate of 6.6% per year, what is the monthly loan payment?
6. Assume that you borrow $24,000 for four years at an interest rate of 8.0% per year. If the loan

has annual payments, what is the total amount of interest that you will pay over the life of the loan?

7. Assume that you borrow $40,000 for three years at an interest rate of 5.2% per year. If the loan has quarterly payments, what is the amount of principal in the first payment?
8. If the present value of a perpetuity is $122,1390 when the discount rate is 7.3% per year, what is the amount of the annual payment?
9. A security will pay $500 in one year, $400 in two years, and $300 in three years. If the appropriate discount rate is 8.4% per year, what is the value of the security today?
10. Assume that you have $200,000 in your retirement account, you plan to invest $10,000 at the end of each year, and your goal is to have $800,000. If you earn an interest rate of 5.9% per year, how many years will it take for you to achieve your goal?