Question : 21.              Interest is: A. Time. B. A borrower’s payment to the : 1256236

 

21.              Interest is:

A. Time.

B. A borrower’s payment to the owner of an asset for its use.

C. The same as a savings account.

D. Always a liability.

E. Always an asset.

22. Which interest rate column would you use to determine the factor from a present value table or a future value table for 8% compounded quarterly?

A. 12%

B. 6%

C. 3%

D. 2%

E. 1%

23.              A company is considering investing in a project that is expected to return $350,000 four years from now. How much is the company willing to pay for this investment if the company requires a 12% return?

A. $ 55,606

B. $137,681

C. $222,425

D. $265,764

E. $350,000

24.              Sam has a loan that requires a single payment of $4,000 at the end of three years. The loan’s interest rate is 6%, compounded semiannually. How much did Sam borrow?

A. $3,358.40

B. $4,000.00

C. $3,660.40

D. $4,776.40

E. $3,350.00

25.              A company expects to invest $5,000 today at 12% annual interest and plans to receive $15,529 at the end of the investment period. How many years will elapse before the company accumulates the $15,529?

A. 0.322 years

B. 3.1058 years

C. 5 years

D. 8 years

E. 10 years

26.              Keisha has $3,500 now and plans on investing it in a fund that will pay her 12% interest compounded quarterly. How much will Keisha have accumulated after two years?

A. $4,433.80

B. $4,340.00

C. $4,390.40

D. $3,920.00

E. $3,500.00

27.               How long will it take an investment of $25,000 at 6% compounded annually to accumulate to a total of $35,462.50?

A) 4 years

B) 5 years

C) 6 years

D) 2 years

E) 10 years

28.              What interest rate is required to accumulate $6,802.50 in four years from an investment of $5,000?

A. 5%

B. 8%

C. 10%

D. 12%

E. 15%

29.              Crowe Company has acquired a building with a loan that requires payments of $20,000 every six months for five years. The annual interest rate on the loan is 12%. What is the present value of the building?

A. $72,096

B. $113,004

C. $147,202

D. $86,590

E. $200,000

30.              Jon Shear expects an investment of $25,000 to return $6,595 annually. His investment is earning 10% per year. How many annual payments will he receive?

A. Five payments

B. Six payments

C. Four payments

D. Three payments

E. More than six payments

31.              A company is considering an investment that will return $20,000 at the end of each semiannual period for four years. If the company requires an annual return of 10%, what is the maximum amount it is willing to pay for this investment?

A. Not more than $63,398

B. Not more than $126,796

C. Not more than $80,000

D. Not more than $129,264

E. Not more than $160,000

32.              What amount can you borrow if you make six quarterly payments of $4,000 at a 12 % annual rate of interest?

A. $24,838.00

B. $21,668.80

C. $31,049.00

D. $40,000.00

E. $44,800,00

33. An individual is planning to set-up an education fund for her children. She plans to invest $10,000 annually at the end of each year. She expects to withdraw money from the fund at the end of 10 years and expects to earn an annual return of 8%. What will be the total value of the fund at the end of 10 years?

A. $  46,320

B. $  67,107

C. $100,000

D. $144,870

E. $215,890

34.              Chad is setting up a retirement fund, and he plans on depositing $5,000 per year in an investment that will pay 7% annual interest. How long will it take him to reach his retirement goal of $69,080?

A. 13.816 years

B. 0.072 years

C. 10 years

D. 20 years

E. 5 years