Finance ch. 5

# Finance ch. 5 - bank time deposit that pays a nominal...

This preview shows pages 1–2. Sign up to view the full content.

7. A bank recently loaned you \$15,000 to buy a car. The loan is for five years (60 months) and is fully amortized. The nominal rate on the loan is 12%, and payments are made at the end of each month. What will be the remaining balance on the loan after you make the 30 th payment? A) \$ 7,599.03 B) \$ 8,363.62 C) \$ 8,637.38 D) \$14,515.50 E) \$ 8,611.17 Points Earned: 5.0/5.0 Correct Answer(s): E 8. Your lease calls for payments of \$500 at the end of each month for the next 12 months. Now your landlord offers you a new 1-year lease that calls for zero rent for 3 months, then rental payments of \$700 at the end of each month for the next 9 months. You keep your money in a

This preview has intentionally blurred sections. Sign up to view the full version.

View Full Document
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: bank time deposit that pays a nominal annual rate of 5%. By what amount would your net worth change if you accept the new lease? (Hint: Your return per month is 5%/12 = 0.4166667%.) A) +\$509.81 B) +\$125.30 C) -\$253.62 D) -\$509.81 E) +\$253.62 Points Earned: 5.0/5.0 Correct Answer(s): C 9. Suppose you borrowed \$25,000 at a rate of 8% and must repay it in 4 equal installments at the end of each of the next 4 years. How much would you still owe at the end of the first year, after you have made the first payment? A) \$18,513 B) \$21,110 C) \$19,452 D) \$18,976 E) \$19,049 Points Earned: 5.0/5.0 Correct Answer(s): C...
View Full Document

{[ snackBarMessage ]}

### Page1 / 2

Finance ch. 5 - bank time deposit that pays a nominal...

This preview shows document pages 1 - 2. Sign up to view the full document.

View Full Document
Ask a homework question - tutors are online