Quiz

Question 1 1 pts You expect to receive $9,500 in 6 years from a lawsuit settlement. What is the present value of the settlement? Use an annual interest rate of 7.75%.

You expect to receive $9,500 in 6 years from a lawsuit settlement. What is the present value of the settlement? Use an annual interest rate of 7.75%.

$6,571

$6,251

$6,070

$5,518

$6,290

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Question 2 1 pts What is the monthly payment on a $770,000 mortgage? Assume a standard 30-year, 5.5% mortgage with monthly payments.

What is the monthly payment on a $770,000 mortgage? Assume a standard 30-year, 5.5% mortgage with monthly payments.

$4,371

$4,260

$4,617

$3,948

$4,199

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Question 3 1 pts You just won the lottery, which promises you $200,000 per year for the next 20 years. You receive the first payment today (hint: annuity due). If your discount rate is 9.25%, what is the present value of your winnings?

You just won the lottery, which promises you $200,000 per year for the next 20 years. You receive the first payment today (hint: annuity due). If your discount rate is 9.25%, what is the present value of your winnings?

$1,774,025

$1,793,643

$1,959,555

$1,885,159

$2,038,975

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Question 4 1 pts You just paid $905 for a security that claims it will pay you $1,925 in 6 years. What is your annual rate of return? That is, at what rate are you discounting cash flows?

You just paid $905 for a security that claims it will pay you $1,925 in 6 years. What is your annual rate of return? That is, at what rate are you discounting cash flows?

13.40%

13.21%

12.99%

14.08%

14.31%

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Question 5 1 pts What is the future value of $9,500 in 8 years? Use a nominal rate (monthly compounding) of 8.25%.

What is the future value of $9,500 in 8 years? Use a nominal rate (monthly compounding) of 8.25%.

$18,339

$19,948

$19,651

$19,273

$16,991

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Question 6 1 pts What is the...