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1
A) ordinary annuities; annuities due B) late annuities; straight annuities C) straight annuities; late annuities D) annuities due; ordinary annuities E) ordinary annuities; early annuities 2
A) $363.39 B) $381.56 C) $374.04 D) $455.66 E) $394.69 3
A) The APR on a loan requiring monthly payments is the annual interest rate you actually pay. B) Compounding will typically not lead to differences between quoted and effective rates. C) When comparing investments it is best not to rely solely on quoted rates. D) An APR is the interest rate per period divided by the number of periods per year. E) With monthly compounding, the APR will be larger than the effective annual rate. 4
A) choose Account A because it has a higher APR B) choose Account B because it has a higher APR C) choose Account B because it is compounded more often D) choose either since you would be indifferent between the two E) choose Account A because you will pay less in taxes 5
A) II only B) II and III only C) III only D) I, II, and IV only E) II, III, and IV only 6
A) $299.02 B) $259.82 C) $338.99 D) $379.16 E) $376.88 7
A) $1,050.00 B) $1,047.93 C) $1,145.56 D) $1,237.21 E) $1,269.15 8
A) 6.0% B) 5.0% C) 4.0% D) 8.0% E) 7.0% 9
A) 8.00% B) 8.16% C) 8.24% D) 8.53% E) 16.64% 10
A) $89.72 B) $83.33 C) $95.24 D) $128.43 E) $111.62
2002 McGraw-Hill Higher Education