Chapter 05 Quiz B Student Name _________________________ Input should be in RED

________ 1. hi!h one o" the "ollo#in$ t%pes o" loans is repaid in one lump sum pa%ment&
a. pure dis!ount b. amortized !. interest'onl% d. installment
__EC_____ (. ) ban* is o""erin$ %ou a !redit !ard #ith an )+R o" 15., per!ent- !ompounded monthl%. hat is the e""e!ti.e
annual rate&
a. 1/.01 per!ent b. 12.0/ per!ent !. 12.11 per!ent d. 11.01 per!ent
________ 0. 3ou ha.e "ound a !ar %ou #ould li*e to pur!hase. 4he !ar !osts 5,-1,0 and %ou ha.e 5/00 to pa% as a
do#n pa%ment. 3our ban* #ill loan %ou the balan!e at /., per!ent interest "or 5 %ears. hat #ill be the
amount o" %our monthl% loan pa%ment&
a. 51/5.(1 b. 5126.(, !. 5121.1/ d. 5110.5(
________ 6. 4#o %ears "rom no#- 4re% Constru!tion #ould li*e to pur!hase some ne# e7uipment !ostin$ 51.6( million.
4he !ompan% earns 5.1 per!ent !ompounded monthl% on its sa.in$s. 8o# mu!h does the !ompan% need to
sa.e at the be$innin$ o" ea!h month i" it #ants to pa% !ash "or this pur!hase&
a. 556-10,./0 b. 55/-012./1 !. 55/-0(5.,, d. 551-(15.60
___EC_____ 5.) pre"erred sto!* pa%s a / per!ent annual di.idend per share and pro.ides in.estors #ith , per!ent rate o"
return. hat is the !urrent pri!e per share&
a. 566.00 b. 55(.(5 !. 5//./2 d. 5/1.25
________ /. 3our $oal is to retire (1 %ears "rom no# and ha.e in.estments #orth 50./ million at that time. 4oda%-
%ou ha.e 51,1-000 in %our in.estment a!!ount and plan on addin$ an additional 51(-000 to that a!!ount ea!h
%ear. hat annual rate o" return must %ou earn on a.era$e to a!hie.e %our $oal&
a. 10.6( per!ent b. 11.01 per!ent !. 1(.1/ per!ent d. 16.02 per!ent
________ 2. Re$ent Suppl% #ants to build a ne# o""i!e buildin$. 4he "irm has bud$eted monthl% pa%ments o" 5(/-000 "or
(5 %ears at 2.1 per!ent interest- !ompounded monthl%. Based on this bud$et- ho# mu!h !an the "irm a""ord
to borro# to build the buildin$&
a. 5(0-(1,-616 b. 50-6(2-001 !. 50-///-//2 d. 56-0(1-602
________ 1. ) lo!al !harit% re!ei.es annual in!ome o" 5(1-500 "rom a trust "und established b% a $enerous donor se.eral
%ears a$o. 4he trust "und earns a "i9ed annual return o" 5.5 per!ent. 8o# mu!h did the donor !ontribute to
establish this "und&
a. 561/-,1,.(, b. 5500-000.00 !. 5511-111.1( d. 55(5-000.00
__EC______ ,.:ne %ear a$o- %ou too* out a 5'%ear- 525-000 interest'onl% loan. 4he interest rate on the loan is 1.(5 per!ent
and pa%ments are to be made annuall%. hat is the amount o" the loan pa%ment that is due toda%&
a. 5/-112.50 b. 5/-,(1.61 !. 512-6/2.10 d. 511-,01.12
________ 10. 3ou are #or*in$ %our #a% throu$h !olle$e and ha.e de!ided that %ou #ould li*e to help pro.ide a !olle$e
edu!ation to #orth% students in the "uture. 4hus- %ou ha.e de!ided to set aside 51-000 ea!h 7uarter "or the
ne9t 10 %ears and then donate %our entire sa.in$s to the lo!al !olle$e to pro.ide perpetual "undin$ "or
s!holarships. 8o# mu!h mone% #ill %ou donate to the !olle$e i" %ou earn an a.era$e return on %our sa.in$s
o" ,.5 per!ent- !ompounded 7uarterl%&
a. 562-(1,.02 b. 551-(51.(/ !. 551-125.(0 d. 5/5-5/6.01