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1 | |
Susan's RRSP is worth $75,000 today. She will continue to make contributions of $1000 at the end of every three months. The RRSP earns 9% compounded monthly. Rounded to the nearest month, how long will it be until she surpasses $150,000 in her RRSP? |
| | A) | 5 years and 3 months |
| | B) | 5 years and 2 months |
| | C) | 5 years and 6 months |
| | D) | 5 years and 9 months |
| | E) | 6 years |
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2 | |
Harry wants to have $25,000 ten years from now. He plans to make equal deposits at the end of each month. What must be the amount of each deposit if the deposits earn 6% compounded monthly? |
| | A) | $151.79 |
| | B) | $152.55 |
| | C) | $158.06 |
| | D) | $193.30 |
| | E) | None of the above |
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3 | |
Today, Martha has $20,000 in an investment account that earns 12% compounded monthly. If she decides to withdraw $1500 every six months beginning six months from today, when will Martha make the last withdrawal? |
| | A) | 14 years and 6 months from now |
| | B) | 13 years and 4 months from now |
| | C) | 12 years and 6 months from now |
| | D) | 2 years and one month from now |
| | E) | 2 years and 5 months from now |
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4 | |
How long will it take to save at least $10,000 by making deposits of $100 at the end of every month to an investment account earning 9% compounded monthly? |
| | A) | 15.5 years |
| | B) | 15 years and 3 months |
| | C) | 8 years and 4 months |
| | D) | 6 years |
| | E) | 6 years and 3 months |
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5 | |
A $25,000 mortgage loan is to be repaid by monthly payments of $350. If the interest rate on the loan is 11% compounded semiannually, what is the term of the loan? |
| | A) | 9 years and 8 months |
| | B) | 9 years and 7 months |
| | C) | 28 years and 9 months |
| | D) | 9 years and 5 months |
| | E) | 28 years and 3 months |
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6 | |
How long will it take to repay an $8000 loan if payments of $650 are made at the end of each quarter, and the interest on the loan is 18% compounded monthly? |
| | A) | 1 year and 7 months |
| | B) | 4 years and 6 months |
| | C) | 4 years and 9 months |
| | D) | 6 years and 2 months |
| | E) | 4 years and 8 months |
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7 | |
A company borrowed $80,000 at 16% compounded quarterly. The loan is to be repaid by 36 equal quarterly payments. The first payment is due two years after the date of the loan. What is the size of the quarterly payment? |
| | A) | $5567.64 |
| | B) | $4230.95 |
| | C) | $4068.22 |
| | D) | $5353.50 |
| | E) | $5790.35 |
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8 | |
How long can annual scholarship payments of $5000 be made at the end of each year from a $75,000 fund that earns 7% compounded annually? |
| | A) | 10.6 years |
| | B) | 20 years |
| | C) | 50 years |
| | D) | 100 years |
| | E) | Forever |
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9 | |
A $25,000 purchase requires ten equal quarterly payments. The first payment is due two years after the date of purchase, and the interest rate charged is 14% compounded semiannually. What is the size of each payment? |
| | A) | $3928.55 |
| | B) | $3797.87 |
| | C) | $2997.07 |
| | D) | $3627.94 |
| | E) | $4597.30 |
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10 | |
$40,000 is placed in a fund today earning 8% compounded monthly. How many monthly withdrawals of $3000 can it provide if the first withdrawal occurs three years from today? (Count the last withdrawal of less than $3000.) |
| | A) | 15 months |
| | B) | 16 months |
| | C) | 17 months |
| | D) | 18 months |
| | E) | 19 months |
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11 | |
A $25,000 loan at 15% compounded quarterly is to be repaid by 60 equal quarterly payments. The first payment is due two years after the date of the loan. What is the size of the quarterly payment? |
| | A) | $345.15 |
| | B) | $1015.10 |
| | C) | $1413.85 |
| | D) | $340.00 |
| | E) | $1362.74 |
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2003 McGraw-Hill Higher Education