|
1) A company borrowed cash from the bank by signing a 6 year, 8% installment note. The present value of an annuity at 8% for 6 years is 4.6229. Each annuity payment equals $84,362.63. The present value of the note is (closest to): |
| A | $287,810.00. | ||||||||||
| B | $84,362.63. | ||||||||||
| C | $390,000.00. | ||||||||||
| D | $474,362.63. | ||||||||||
| E | $103,238.63.
2) Sam Kay deposits $7,200 in an account that earns interest at an annual rate of 12%, compounded quarterly. The $7,200 plus earned interest must remain in the account 3 years before it can be withdrawn. How much money will be in the account at the end of 3 years? (Use Table B.2) (Round “FV factor” to 4 decimal places and final answer to 2 decimal places. Omit the “$” sign in your response.) 3) Which interest rate column would you use from a present value table or a future value table for 8% compounded quarterly?
|