FINA 3310:03, Spring 2015-Midterm 2, uantitative 1. Ir soday is year 0, what is

Question

FINA 3310:03, Spring 2015-Midterm 2, uantitative 1. Ir soday is year 0, what is the Future value of the following cash flows 10 years from nowt Assume an interest rale or 78 percent per year A $35.21157 B$37,235.16 C. $40,822.55 D.$42.321.68 E. 544,564.54 2. Uptown Insurance offers an annuity due with semiannual payments for 25 years at 6 percent interest. The annuity costs $200,000 today. What is the amount of each annuity payment? A. $7,546.70 B. $7,600.00 C $7,773.10 D. $7,800.00 E. $7,856,25 3. Julie is borrowing $12,800 to purchase a car.T interest will she pay on this loan if she pays the loan as agreed? Round your answer to the nearest whole dolla A. $1,338 B. $1,414 C. $1,459 D. $1,506 E. $1,534

Explanation / Answer

1. Answer is C 40,822.55. calculated as follows:

2. Option C is the correct answer 7,773.10, calculated as follows

200,000 = c* (1-(1+i)^-n)/i

where n= 50, 25 years semiannual payments, i=3%, 6% annualy

200,000 = c* 25.73

C = 200,000/25.73 = 7,773.10

3. option E, $ 1,534 is the correct answer.

Loan schedule:

2 8500 =8500*(1.078)^8 15501.33181 3 9300 =9300*(1.078)^7 15733.09897 6 7100 =7100*(1.078)^4 9588.118484 Total       40,822.55

Related Questions

Navigate

• Browse (All)
• Browse F
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.