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
