University of North Georgia, Dahlonega FINC 3440 Exam 14 1)If the interest rate is 5

2. Nine years ago you invested $1,000 and the investment is now worth $2,121. What annual rate of return did you earn?
3. What is the present value of an ordinary annuity that pays $500 every month for three years if

the discount rate is 6.0% per year?

4. If the present value of an ordinary annuity that pays $350 each month for three years is

$11,819.12, what is the annual discount rate?

5. If you borrow $32,000 for six years to buy a car at an interest rate of 4% 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 $4,000 for six years at an interest rate of 5.2% per year. If the loan has annual payments, what is the amount of principal in the first payment?
8. The present value of a perpetuity is $9,444.44 and the annual payment is $425. What is the annual discount rate?
9. Assume that you will invest $200 in one year, $400 in two years, and $600 in three years. If you earn an interest rate of 7.2% per year, how much will you have in three years?
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 earn an interest rate of 6.7% per year, how many years will it take for you to achieve your goal?