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Question;53. What?s the present value of \$1,525 discounted back 5 years;if the appropriate interest rate is 6%, compounded monthly?;a. \$969;b. \$1,020;c. \$1,074;d. \$1,131;e. \$1,187;54. Master Card and other credit card issuers must by law print;the Annual Percentage Rate (APR) on their monthly statements. If the APR is stated to be 18.00%, with;interest paid monthly, what is the card's EFF%?;a. 18.58%;b. 19.56%;c. 20.54%;d. 21.57%;e. 22.65%;55. Riverside Bank offers to lend you \$50,000 at a nominal rate;of 6.5%, compounded monthly. The loan;(principal plus interest) must be repaid at the end of the year. Midwest Bank also offers to lend you the;\$50,000, but it will charge an annual rate of 7.0%, with no interest due until;the end of the year. How much higher or;lower is the effective annual rate charged by Midwest versus the rate charged;by Riverside?;a. 0.52%;b. 0.44%;c. 0.36%;d. 0.30%;e. 0.24%;56. Suppose Community Bank offers to lend you \$10,000 for one;year at a nominal annual rate of 8.00%, but you must make interest payments at;the end of each quarter and then pay off the \$10,000 principal amount at;the end of the year. What is the;effective annual rate on the loan?;a. 8.24%;b. 8.45%;c. 8.66%;d. 8.88%;e. 9.10%;57. Suppose a bank offers to lend you \$10,000 for 1 year on a;loan contract that calls for you to make interest payments of \$250.00 at the;end of each quarter and then pay off the principal amount at the end of;the year. What is the effective annual;rate on the loan?;a. 8.46%;b. 8.90%;c. 9.37%;d. 9.86%;e. 10.38%;58. Charter Bank pays a 4.50% nominal rate on deposits, with monthly;compounding. What effective annual rate;(EFF%) does the bank pay?;a. 3.72%;b. 4.13%;c. 4.59%;d. 5.05%;e. 5.56%;59. Suppose your credit card issuer states that it charges a;15.00% nominal annual rate, but you must make monthly payments, which amounts;to monthly compounding. What is the effective annual rate?;a. 15.27%;b. 16.08%;c. 16.88%;d. 17.72%;e. 18.61%;60. Pace Co. borrowed \$20,000 at a rate of;7.25%, simple interest, with interest paid at the end of each;month. The bank uses a 360-day;year. How much interest would Pace have;to pay in a 30-day month?;a. \$120.83;b. \$126.88;c. \$133.22;d. \$139.88;e. \$146.87

Paper#44777 | Written in 18-Jul-2015

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