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##### quiz 5-3 homework

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Question;Review Test Submission: Quiz 5 3/12/14, 11:50 AM;H Review;Test Submission: Quiz 5;Week;5;Review Test Submission: Quiz 5;Question 1 1;out of 1 points;What is the present value of a $775 annuity payment over 6;years if interest rates are 11%?;Question 2;0 out of 1 points;Due to poor spending habits, Ricky has accumulated $10,000;in credit card debt. He has missed several payments and now the annual interest;rate on the card is 18.95%! If he pays $175 per month on the card, how long;will it take Ricky to pay of the card?;Question 3;1 out of 1 points;Number of Annuity Payments Joey realizes that he has charged;too much on his credit card and has racked up $4,000 in debt. If he can pay;$200 each month and the card;Question 4;1 out of 1 points;Jane has been saving $500 in her retirement account each;month for the last 20 years and plans to continue contributing $500 each month;for the next 20 years. Her account has been earning an 8% annual interest rate;and she expects to earn the same rate for the next 20 years. Her twin brother;Hal, has not saved anything for the last 20 years. Due to sibling rivalry, he;wants to have as much as Jane is expected to have at the end of 20 years. If;Hal expects to earn the same annual interest rate as Jane, how much must Hal;save each month to achieve his goal?;Question 5;0 out of 1 points;Present Value of Multiple Annuities A small business owner;visits his bank to ask for a loan. The owner states that he can repay a loan at;$1,500 per month for the next three years and then $500 per month for the two;years after that. If the bank is charging customers 5.5 percent APR, how much;would it be willing to lend the business owner?;Question 6;0 out of 1 points;Number of Annuity Payments Phoebe realizes that she has;charged too much on her credit card and has racked up $7,000 in debt. If she;can pay $200 each month and the;card charges 17 percent APR (compounded monthly), how long;will it take her to pay of the debt?;Question 7;0 out of 1 points;Assume that you contribute $300 per month to a retirement;plan for 25 years. Then you are able to increase the contribution to $500 per;month for 20 years. Given a 9% interest rate, what is the value of your;retirement plan after 45 years?;Question 8;1 out of 1 points;Compounding monthly versus annually causes the interest rate;to be efectively higher, and thus the future value;Question 9 1;out of 1 points;The present value of annuity payments made far into the;future is;Question 10;1 out of 1 points;You are deciding among several diferent bank accounts. Which;of the following will generate the highest efective annual rate (EAR)?;Question 11;0 out of 1 points;Present Value of an Annuity Due If the present value of an;ordinary, 4-year annuity is $1,000 and interest rates are 6 percent, what's the;present value of the same annuity due?;Question 12;1 out of 1 points;The simple form of an annualized interest rate is called the;annual percentage rate (APR). The efective annual rate (EAR) is a;Selected;Question 13;1 out of 1 points;A perpetuity pays $250 per year and interest rates are 8.5%.;How much would its value change if interest decreased to 5.5%? Did the value;increase or decrease?;Question 14;1 out of 1 points;Jasmine has decided that she wants to build enough;retirement wealth that, if invested at 6% per year, will provide her with;$3,000 of monthly income for 30 years. To date, she has saved nothing but she;still has 25 years until she retires. Jasmine believes that she can earn 6% on;her investments until she retires. How much money does she need to contribute;per month to reach her goal?;Selected Answer: $722.05;Correct Answer: $722.05

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