Question : 71.In five years, you plan starting graduate school to earn : 1325659

71.In five years, you plan on starting graduate school to earn your MBA. You know that graduate school can be expensive and you expect you will need $15,000 per year for tuition and other school expenses. These payments will be made at the BEGINNING of the school year. To have enough money to attend graduate school, you decide to start saving TODAY by investing in a money market fund that pays 4% APR with monthly compounding. You will make monthly deposits into the account starting TODAY for the next five years. How much will you need to deposit each month to have enough savings for graduate school? (Assume that money that is not withdrawn remains in the account during graduate school and the MBA will take two years to complete.)

a.$438.15

b.$440.26

c.$442.16

d.$443.64

72.As a young graduate, you have plans on buying your dream car in three years. You believe the car will cost $50,000. You have two sources of money to reach your goal of $50,000. First, you will save money for the next three years in a money market fund that will return 8% annually. You plan on making $5,000 annual payments to this fund. You will make yearly investments at the BEGINNING of the year. The second source of money will be a car loan that you will take out on the day you buy the car. You anticipate the car dealer to offer you a 6% APR loan with monthly compounding for a term of 60 months. To buy your dream car, what monthly car payment will you anticipate?

a.$483.99

b.$540.15

c.$627.73

d.$652.83

73.Which of the following investments would have the highest future value (in year 5) if the discount rate is 12%?

a.A five year ordinary annuity of $100 per year.

b.A five year annuity due of $100 per year.

c.$700 to be received at year 5

d.$500 to be received TODAY (year 0)

74.Cozmo Costanza just took out a $24,000 bank loan to help purchase his dream car. The bank offered a 5-year loan at a 6% APR. The loan will feature monthly payments and monthly compounding of interest. What is the monthly payment for this car loan?

a.$400.00

b.$463.99

c.$470.25

d.$474.79

75.A young graduate invests $10,000 in a mutual fund that pays 8% interest per year. What is the future value of this investment in 12 years?

a.$12,000

b.$19,600

c.$22,000

d.$25,182

76.An electric company has offered the following perpetuity to investors to raise capital for the firm. The perpetuity will pay $1 next year, and it is promised to grow at 5% per year thereafter. If you can earn 10% on invested money, how much would you pay today for this perpetuity?

a.$100

b.$50

c.$40

d.$20

77.Cozmo Costanza just took out a $24,000 bank loan to help purchase his dream car. The bank offered a 5-year loan at a 6% APR. The loan will feature monthly payments and monthly compounding of interest. Suppose that Cozmo would like to pay off the remaining balance on his car loan at the end of the second year (24 payments). What is the remaining balance on the car loan after the second year?

a.$10,469

b.$12,171

c.$14,400

d.$15,252

78.A $100 investment yields $112.55 in one year. The interest on the investment was compounded quarterly. From this information, what was the stated rate or APR of the investment?

a.12.55%

b.12.25%

c.12.15%

d.12.00%

79.What is the future value at year 3 of the following set of cash flows if the discount rate is 11%?

Year0123

Cash flow$100$125$200$225

a.$738

b.$761

c.$789

d.$812

80.A $200 investment in an account that pays 7% continuous interest would be worth how much in twenty years?

a.$774

b.$792

c.$811

d.$819