Question : 11) Tom wants to borrow $15,000 in order to expand : 1253352

 

11) Tom wants to borrow $15,000 in order to expand Tom’s Wear. If he repays the money in forty equal monthly installments, he can get an interest rate of 6%. What would be the amount of each installment payment?

A) $375.00

B) $397.50

C) $996.93

D) $414.68

 

12) Tom wants to borrow $15,000 in order to expand Tom’s Wear. If he repays the money in forty equal monthly installments, he can get an interest rate of 6%. How much interest will he pay over the life of the loan?

A) $1,587.20

B) $900.00

C) $3,000

D) $414.68

 

13) On January 1, 2011, Alpha Enterprise signed a $100,000, 6%, 20-year mortgage note to buy a new warehouse. The mortgage will be repaid in a series of twenty equal annual installment payments. Calculate the amount of each payment. Round your answer to the nearest dollar.

A) $8,718

B) $5,000

C) $11,000

D) $6,000

 

14) On January 1, 2011, Zenith, Inc. signed a $200,000, 5%, 20-year mortgage note to buy a new office building. The mortgage will be repaid in a series of twenty equal annual installment payments. Calculate the amount of each payment. Round your answer to the nearest dollar.

A) $10,000

B) $16,049

C) $10,500

D) $20,000

15) On January 1, 2011, Nadir Company issued $1,000,000 of 6%, 20-year bonds when the market rate of interest was 5%. The bonds pay interest annually on December 31. To calculate the amount of cash that Nadir received, you must find ________.

A) only the present value of $1,000,000

B) only the present value of an annuity of $60,000

C) both the present value of $1,000,000 and the present value of an annuity of $50,000

D) both the present value of $1,000,000 and the present value of an annuity of $60,000

 

16) On January 1, 2011, Bondz, Inc. issued $1,000,000 of 5%, 10-year bonds when the market rate of interest was 6%. The bonds pay interest annually on December 31. To calculate the amount of cash that Bondz received, you must use a discount rate of ________.

A) 20%

B) 6%

C) 5%

D) The answer cannot be determined from the information given.

 

17) On January 1, 2011, Bondz, Inc. issued $1,000,000 of 10%, 10-year bonds when the market rate of interest was 12%. The bonds pay interest QUARTERLY. To calculate the amount of cash that Bondz received, you must use a discount rate of ________.

A) 10%

B) 12%

C) 4%

D) 3%

 

18) On January 1, 2011, Alpha Company issued $1,000,000 of 5%, 20-year bonds to buy a new computerized accounting system. The market rate of interest was 6%. The bonds pay interest annually on December 31. These bonds sold at a _____ because the market rate of interest is _____ than the stated interest rate.

A) discount; higher

B) premium;  higher

C) discount; lower

D) premium; lower

19) On January 1, 2011, Alpha Company issued $1,000,000 of 5%, 20-year bonds to buy a new computerized accounting system. The market rate of interest was 6%. The bonds pay interest annually on December 31. How much cash did Alpha receive when the bonds were sold?

A) $1,000,000

B) $1,124,622.60

C) $885,296

D) $950,386

 

20) On January 1, 2011, Alpha Company issued $1,000,000 of 5%, 20-year bonds to buy a new computerized accounting system. The market rate of interest was 6%. The bonds pay interest annually on December 31. How much cash will bondholders receive when the bonds mature?

A) $1,000,000

B) $1,124,622.60

C) $885,296

D) $950,386

 

 

 

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