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
