16/2/2014
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Feedback — Assignment 2
You submitted this Assignment on
Sun 16 Feb 2014 11:14 AM PST
. You got a
score of
95.00
out of
100.00
. You can
attempt again
, if you'd like.
Please read all questions and instructions carefully. Note that you only need to enter answers
in terms of numbers and without any symbols (including $, %, commas, etc.). Enter all dollars
without decimals and all interest rates with up to two decimals. Read the syllabus for
examples. The points for each question are listed in parentheses at the start of the question,
and the total points for the entire assignment adds up to 100.
Question 1
(5 points) Carlos goes to the bank to take out a personal loan. The stated annual interest rate is
12%, but interest is compounded monthly and he will make monthly payments. The effective
annual interest rate (EAR) of the loan is less than 12%.
Your Answer
Score
Explanation
True
False
5.00
Correct. You understand compounding.
Total
5.00 / 5.00
Question Explanation
Basics of compounding.
Question 2
(5 points) Gloria is 35 and trying to plan for retirement. She has put a budget together and plans
to save $4,800 per year, starting at the end of this year, in a retirement fund until she is 65.
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View Full Document16/2/2014
Quiz Feedback  Coursera
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Assume that she can make 7% on her account. How much will she have for retirement at age
65?
Your Answer
Score
Explanation
499245
345514
453412
5.00
Correct. You know how to calculate the FV of an annuity.
144000
Total
5.00 / 5.00
Question Explanation
FV of an annuity calculation. She should have a minimum of $144,000. Why?
Question 3
(5 points) Mohammad has just turned 21 and now has access to the money his parents have
been putting away in an account for him since he was 5 years old. His mother has asked him to
guess what his account is worth given that they have invested $1,000 every year in the account
starting on his 5th birthday and have just made one. The interest rate on the account has been
3.5% annually. How much is Mohammad’s account worth today? (Enter just the number
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 Spring '12
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