Lesson 6 Assignment

Suppose you signed a contract for a special assignment over the next 5 years. You will be paid $8467 at the end of each year.

If your required rate of return is 7%, what is this contract worth in today? (Show your answer to the nearest cent. Round your

answer to the nearest 2 decimal places. DO NOT round until after all calculations have been completed and you have reached

your final answer. If your answer ends in a zero, only include 1 decimal place and omit the zero. If the answer ends in two

zeros after rounding, do not use any decimal places as ANGEL does not recognize the ".00" endings and will remove points

from your score.)
Value of contract today = [removed]

You need a loan to purchase new equipment. The loan will be paid off over 8 years with payments made at the end of every

quarter. If the stated annual rate is 25% and quarterly payments are 391, what is the loan amount? (Show your answer to

the nearest cent. Round your answer to the nearest 2 decimal places. DO NOT round until after all calculations have been

completed and you have reached your final answer. If your answer ends in a zero, only include 1 decimal place and omit the

zero. If the answer ends in two zeros after rounding, do not use any decimal places as ANGEL does not recognize the ".00"

endings and will remove points from your score.)
Loan amount = [removed]

You would like to purchase a car for $21383. If the car loan is 5.7% financed over 5 years, what will the monthly payments

be for this car? (Show your answer to the nearest cent. Round your answer to the nearest 2 decimal places. DO NOT round

until after all calculations have been completed and you have reached your final answer. If your answer ends in a zero, only

include 1 decimal place and omit the zero. If the answer ends in two zeros after rounding, do not use any decimal places as

ANGEL does not recognize the ".00" endings and will remove points from your score.)
Loan payment = [removed]

What is the most that you would pay for an investment that promises to pay $2448 a year forever with the first payment

starting one year from now? Assume that your required rate of return for this investment is 17.2%. (Show your answer to

the nearest cent. Round your answer to the nearest 2 decimal places. DO NOT round until after all calculations have been

completed and you have reached your final answer. If your answer ends in a zero, only include 1 decimal place and omit

the zero. If the answer ends in two zeros after rounding, do not use any decimal places as ANGEL does not recognize

the ".00" endings and will remove points from your score.)
[removed]

A loan has a stated annual rate of 18.3%. If loan payments are made monthly and interest is compounded monthly, what is

the effective annual rate of interest? (Show your answer to the fourth decimal place. DO NOT round until after all calculations

have been completed and you have reached your final answer. If your answer ends in a zero, only include 1 decimal place

and omit the zero. If the answer ends in two zeros after rounding, do not use any decimal places as ANGEL does not

recognize the ".00" endings and will remove points from your score.)
Effective Annual Rate =

You invest $673 at the beginning of every year and your friend invests $673 at the end of every year. If you both earn an

annual rate of return of 8%, how much will each of you have in your account after 17 years? (Show your answer to the nearest

cent. Round your answer to the nearest 2 decimal places. DO NOT round until after all calculations have been completed and

you have reached your final answer. If your answer ends in a zero, only include 1 decimal place and omit the zero.

If the answer ends in two zeros after rounding, do not use any decimal places as ANGEL does not recognize the ".00"

endings and will remove points from your score.)
Amount in friend's account = [removed]

Amount in your accout = [removed]

You currently have $801 in a retirement savings account that earns an annual return of 10%. You want to retire in 40 years

with $1,000,000. How much more do you need to save at the end of every year to reach your retirement goal?
Amount of annual savings needed = [removed]

You currently owe $3012 of your credit card that charges an annual interest rate of 19.4%. You make $157 of new charges

every month and make a payment of $151every month. What will your credit card balance be in three months?
Credit card balance at the end of three months = [removed]

You would like to retire in 31 years. The expected rate of inflation is 3% per year. You currently have a standard of living that

requires $9911 of monthly expenses. Assuming you want to maintain the same standard of living in retirement, what are your

monthly expenses expected to be the first year of retirement? (Show your answer to the nearest cent. Round your answer to

the nearest 2 decimal places. DO NOT round until after all calculations have been completed and you have reached your final

answer. If your answer ends in a zero, only include 1 decimal place and omit the zero. If the answer ends in two zeros after

rounding, do not use any decimal places as ANGEL does not recognize the ".00" endings and will remove points from your

score.)
[removed]

You purchases a house for $166147. You made a down payment of $20,000 and the remainder of the purchase price was

financed with a mortgage loan. The mortgage loan is a 30 year mortgage with an annual interest rate of 5.1%. Mortgage

payments are made monthly. What is the monthly amount of your mortgage payment? (Show your answer to the nearest cent.

Round your answer to the nearest 2 decimal places. DO NOT round until after all calculations have been completed and you

have reached your final answer. If your answer ends in a zero, only include 1 decimal place and omit the zero.

If the answer ends in two zeros after rounding, do not use any decimal places as ANGEL does not recognize the ".00"

endings and will remove points from your score.)
[removed]

Prepare the first row of a loan amortization schedule based on the following information. The loan amount is for

$1021 with an annual interest rate of 10.5%. The loan will be repaid over 7 years with monthly payments.
Loan payment [removed]

Interest portion [removed]

Principle portion [removed]

Loan balance after first monthly payment [removed]

What is the most you would be willing to pay for a investment that will pay you $296 in one year, $213 in two years,

and $240 in three years, if your required rate of return for this type of investment is 24%?
Value of investment = [removed]

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