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University of North Georgia, Dahlonega FINC 3440 Exam 8 1)What is the present value of $200 to be received in nine years if the discount rate is 5

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6. Assume that you borrow $14,000 for five years at an interest rate of 10.0% per year. If the loan has monthly payments, what is the total amount of interest that you will pay over the life of the loan?

7. Assume that you borrow $50,000 for ten years at an interest rate of 6.7% per year. If the loan has

annual payments, what is the amount of principal in the first payment?

8. What is the present value of a perpetuity that pays $500 per year when the discount rate is 4.6% per year?

9. A security will pay $300 in one year and $700 in two years. If the appropriate discount rate is 1% per year, what is the value of the security today?

10. Assume that you have $100,000 in your retirement account, you plan to invest $15,000 at the end of each year, and your goal is to have $1,000,000. If you want to retire in 20 years, what annual rate of return must you earn?