fin ch 5 31-60

recently, you needed money and agreed to sell a car you had inherited at a price of $55,000

7.78

Katie's Dinor spent $113,800 to refurbish its current facility. The firm borrowed 65 percent of the refurbishment cost at 6.82 percent interest for six years. What is the amount of each monthly payment?

$1,254.73

The manager of Gloria's Boutique has approved Carla's application for credit. The maximum payment that has been approved is $65 a month for 24 months. The APR is 15.7 percent. What is the maximum initial purchase that Carla can make given this credit approval?

$1,455.08

you want to purchase a new condominium that costs $287,500.

$1,568.07

McClary Tires plans to save $20,000, $25,000, $27,500, and $30,000 at the end of each year for Years 1 to 4, respectively. If it earns 3.3 percent on its savings, how much will the firm have saved at the end of Year 4?

$107,130.78

Suenette plans to save $600 at the end of Year 1, $800 at the end of Year 2, and $1,000 at the end of Year 3. If she earns 3.4 percent on her savings, how much money will she have saved at the end of Year 3?

$2,468.69

ST Trucking just signed a $3.8 million contract. The contract calls for a payment of $1.1 million today, $1.3 million one year from today, and $1.4 million two years from today. What is this contract worth today at a discount rate of 8.7 percent?

$3,480,817.37

Jake owes $3,400 on his credit card. He is not charging any additional purchases because he wants to get this debt paid in full. The card has an APR of 13.9 percent. How much longer will it take him to pay off this balance if he makes monthly payments of $50 rather than $60?

$3,545

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?

$30,154.50

how much money does suzie need to have in her retirement savings account today if she wishes to withdraw $42,000 a year for 25 years? she expects to earn an average rate of return of 9.75 percent

$388,683.83

Today, you are purchasing a 20-year, 6 percent annuity at a cost of $48,350. The annuity will pay annual payments starting one year from today. What is the amount of each payment?

$4,215.37

JK Industries just signed a sales contract with a new customer. JK will receive annual payments in the amount of $62,000, $108,000, $135,000, and $150,000 at the end of Years 1 to 4, respectively. What is this contract worth at the end of Year 4 if the firm earns 4.3 percent on its savings?

$478,639.54

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?

$54,578.17

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?

$614,184.40

Charlene can afford car payments of $185 a month for 48 months. If the interest rate is 5.65 percent, how much money can she afford to borrow?

$7,931.44

Industrial Tools owes you $38,600. This amount is seriously delinquent so you have offered to accept weekly payments for one year at an interest rate of 3 percent to settle this debt in full. What is the amount of each payment?

$753.71

Kurt wants to have $835,000 in an investment account six years from now. The account will pay .67 percent interest per month. If he saves money every month, starting one month from now, how much will he have to save each month to reach his goal?

$9,062.07

S&S Furniture is offering a bedroom suite for $3,200. The credit terms are 60 months at $55 per month. What is the interest rate on this offer?

1.22 percent

Overnight Trucking recently purchased a new truck costing $150,800. The firm financed this purchase at 8.6 percent interest with monthly payments of $2,100. How many years will it take the firm to pay off this debt?

10.42 years

You have just won a lottery! You can either receive $6,500

2.64 percent

Good Guys will pay you $3,800 a year for 10 years in exchange for $31,300 today. What interest rate will you earn on this annuity?

3.89 percent

Bill just financed a used car through his credit union. His loan requires payments of $275 a month for five years. Assuming that all payments are paid on time, his last payment will pay off the loan in full. What type of loan does Bill have?

amortized

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?

amortized

You just borrowed $3,000 from your bank and agreed to repay the interest on an annual basis and the principal at the end of three years. What type of loan did you obtain?

interest-only

Chandler Tire Co. is trying to decide which one of two projects it should accept. Both projects have the same start-up costs. Project 1 will produce annual cash flows of $52,000 a year for six years. Project 2 will produce cash flows of $48,000 a year for eight years. The company requires a 15 percent rate of return. Which project should the company select and why?

project 1, because the present value of its cash inflows exceeds those of project 2 by $14,211.62

your grandfather started his own business 52 years ago

$226.78

Cromwell is acquiring some land for $1,200,000 in exchange for semiannual payments of $75,000 at an interest rate of 6.35 percent. How many years will it take Cromwell to pay for this purchase?

11.35 years

so you can retire early, you have decided to start saving $500 a month starting one month from now

44.76 years

You just received a loan offer from Friendly Loans. The company is offering you $5,000 at 14.3 percent interest. The monthly payment is only $100. If you accept this offer, how long will it take you to pay off the loan?

5.29 years

City Motors will sell a $15,000 car for $345 a month for 52 months. What is the interest rate?

8.38