Filters
Question type
Study Flashcards

What is the effective annual rate of 9.6 percent compounded semiannually?


A) 9.71 percent
B) 9.83 percent
C) 9.79 percent
D) 9.68 percent
E) 9.92 percent

F) C) and E)
G) A) and B)

Correct Answer

verifed

verified

What is the future value of $25 a week for 40 years at 8.5 percent interest? Assume the first payment occurs at the end of this week.


A) $441,710.03
B) $414,361.08
C) $469,727.15
D) $350,003.14
E) $335,221.18

F) A) and E)
G) B) and D)

Correct Answer

verifed

verified

You just received a loan offer from Friendly Loans.The company is offering you $5,000 at 9.3 percent interest.The monthlypayment is only $100.If you accept this offer,how long will it take you to pay off the loan?


A) 5.84 years
B) 5.29 years
C) 6.80 years
D) 6.33 years
E) 7.59 years

F) A) and E)
G) A) and B)

Correct Answer

verifed

verified

Lee pays 1 percent per month interest on his credit card account.When his monthly rate is multiplied by 12,the resulting answer is referred to as the:


A) .annual percentage rate.
B) compounded rate.
C) effective annual rate.
D) perpetual rate.
E) simple rate.

F) C) and E)
G) B) and D)

Correct Answer

verifed

verified

Capstone Investments is considering a project that will produce cash inflows of $11,000 at the end of Year 1,$24,000 in Year 2,and $36,000 in Year 3.What is the present value of these cash inflows at a discount rate of 12 percent?


A) $41,997.60
B) $46,564.28
C) $54,578.17
D) $54,868.15
E) $63,494.54

F) C) and E)
G) None of the above

Correct Answer

verifed

verified

Postal Express is considering the purchase of a new sorting machine.The sales quote consists of quarterly payments of $37,200 for five years at 7.6 percent interest.What is the purchase price?


A) $621,380.92
B) $614,184.40
C) $687,418.22
D) $774,311.28
E) $836,267.35

F) A) and B)
G) All of the above

Correct Answer

verifed

verified

You owe $6,800on a car loan that has an interest rate of 6.75 percent and monthly payments of $310.You lost your job and your new job pays less,so your lender just agreed to lower the monthly payments to $225 while keeping the interest rate at 6.75 percent.How much longer will it take you to repay this loan than you had originally planned?


A) 10.50 months
B) 11.47 months
C) 9.74 months
D) 12.19 months
E) 18.90 months

F) A) and B)
G) A) and C)

Correct Answer

verifed

verified

The manager of Gloria's Boutique has approved Carla's application for 24 months of credit with maximum monthly payments of $70.If the APR is 14.2 percent,what is the maximum initial purchase that Carla can buy on credit?


A) $1,006.90
B) $1,300.00
C) $1,455.08
D) $1,184.75
E) $1,228.46

F) A) and E)
G) A) and C)

Correct Answer

verifed

verified

Assume your university earns an average rate of return of 5.65 percent on its endowment funds.If a new gift permanently increases annual scholarships by $32,000,what was the amount of the gift?


A) $784,090.91
B) $485,293.05
C) $615,384.62
D) $658,929.38
E) $566,371.68

F) A) and D)
G) C) and D)

Correct Answer

verifed

verified

First Bank offers personal loans at 7.7 percent compounded monthly.Second Bank offers similar loans at 7.4percent compounded daily.Which one of the following statements is correct concerning these loans? Assume a 365-day year.


A) The First Bank loan has an effective rate of 7.98 percent.
B) The Second Bank loan has an effective rate of 8.01 percent.
C) The annual percentage rate for the Second Bank loans is 7.68 percent.
D) Borrowers should prefer the loans offered by First Bank.
E) Both banks offer the same effective rate.

F) All of the above
G) B) and E)

Correct Answer

verifed

verified

Karley's setting aside $32,000 each quarter,starting today,for the next three years for an expansion project.How much money will the firm have at the end of the three years if it can earn an average of 5.45 percent on its savings?


A) $428,409.29
B) $414,123.86
C) $390,411.20
D) $419,766.30
E) $362,009.14

F) None of the above
G) A) and B)

Correct Answer

verifed

verified

Travis borrowed $10,000 four years ago at an annual interest rate of 7 percent.The loan term is six years.Since he borrowed the money,Travis has been making annual payments of $700 to the bank.Which type of loan does he have?


A) Interest-only
B) Pure discount
C) Compound
D) Amortized
E) Complex

F) A) and E)
G) B) and E)

Correct Answer

verifed

verified

What is the effective annual rate of 8.25 percent compounded quarterly?


A) 8.25 percent
B) 8.49 percent
C) 8.38 percent
D) 8.51 percent
E) 8.56 percent

F) C) and D)
G) All of the above

Correct Answer

verifed

verified

A loan that compounds interest monthly has an EAR of 14.40 percent.What is the APR?


A) 13.53 percent
B) 13.59 percent
C) 13.96 percent
D) 14.07 percent
E) 14.10 percent

F) D) and E)
G) A) and E)

Correct Answer

verifed

verified

Your aunt loaned you money at 1.00 percent interest per month.What is the APR of this loan?


A) 11.88 percent
B) 12.00 percent
C) 12.16 percent
D) 16.00 percent
E) 16.28 percent

F) C) and E)
G) A) and C)

Correct Answer

verifed

verified

The Corner Bakery needs $86,000 today for remodeling.They have obtained a 2-year,pure-discount loan at an interest rate of 6.8 percent,compounded annually.How much must they repay in two years?


A) $94,064.20
B) $89,540.21
C) $90,860.00
D) $91,159.39
E) $98,093.66

F) A) and E)
G) A) and B)

Correct Answer

verifed

verified

A loan has an APR of 8.5 percent and an EAR of 8.5 percent.Given this,the loan must:


A) have a one-year term.
B) have a zero percent interest rate.
C) charge interest annually.
D) must be partially amortized with each loan payment.
E) require the accrued interest be paid in full with each monthly payment.

F) B) and D)
G) A) and D)

Correct Answer

verifed

verified

Eric is considering an investment that will pay $8,200 a year for five years,starting one year from today.What is the maximum amount he should pay for this investment if he desires a rate of return of 11.2 percent?


A) $17,899.08
B) $27,117.36
C) $20,186.75
D) $30,154.50
E) $18,153.55

F) A) and B)
G) B) and C)

Correct Answer

verifed

verified

What effective annual rate can a bank earn on an APR of 10.5 percent,compounded monthly?


A) 10.50 percent
B) 10.76 percent
C) 11.84 percent
D) 11.02 percent
E) 13.08 percent

F) B) and C)
G) A) and E)

Correct Answer

verifed

verified

Letitia borrowed $6,000 from her bank two years ago.The loan term is four years.Each year,she must repay the bank $1,500 plus the annual interest.Which type of loan does she have?


A) Amortized
B) Blended discount
C) Interest-only
D) Pure discount
E) Complex

F) None of the above
G) D) and E)

Correct Answer

verifed

verified

Showing 61 - 80 of 114

Related Exams

Exam 1

Introduction to Financial Management

58 Questions

Exam 2

Financial Statements,Taxes,and Cash Flow

106 Questions

Exam 3

Working With Financial Statements

119 Questions

Exam 4

Introduction to Valuation: The Time Value of Money

63 Questions

Exam 6

Interest Rates and Bond Valuation

115 Questions

Exam 7

Equity Markets and Stock Valuation

91 Questions

Exam 8

Net Present Value and Other Investment Criteria

109 Questions

Exam 9

Making Capital Investment Decisions

105 Questions

Exam 10

Some Lessons From Capital Market History

86 Questions

Exam 11

Risk and Return

39 Questions

Exam 12

Cost of Capital

96 Questions

Exam 13

Leverage and Capital Structure

89 Questions

Exam 14

Dividends and Dividend Policy

87 Questions

Exam 15

Raising Capital

69 Questions

Exam 16

Short-Term Financial Planning

104 Questions

Exam 17

Working Capital Management

105 Questions

Exam 18

International Aspects of Financial Management

85 Questions

Show Answer