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University of North Georgia, Dahlonega FINC 3440 Exam 11 1)If the interest rate is 5

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University of North Georgia, Dahlonega

FINC 3440

Exam 11

1)If the interest rate is 5.4% per year, what is the future value of $400 in eight years?

2. Eight years ago you invested $400 and the investment is now worth $1,359. What annual rate of return did you earn?
3. What is the present value of an ordinary annuity that pays $150 annually for seven years if the

discount rate is 9.2% per year?

4. If the present value of an ordinary annuity that pays $600 each year for seven years is $2,703.87, what is the annual discount rate?
5. If you borrow $25,000 for four years to buy a boat at an interest rate of 8.0% per year, what is

the monthly loan payment?

6. Assume that you borrow $100,000 for five years at an interest rate of 0% per year. If the loan has semiannual payments, what is the total amount of interest that you will pay over the life of the loan?
7. Assume that you borrow $36,000 for six years at an interest rate of 3.6% per year. If the loan has

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

8. What is the present value of a perpetuity that pays $300 per year when the discount rate is 6.7% per year?
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. You intend to lease a $25,000 car. The lease term is three years and the value of the car at the end of the lease is expected to be $17,800. If the monthly lease payment is $284.54, what is the annual lease financing rate?