1. The equal annual end-of-year payments required to repay a loan of $60,000 borrowed at 12% for ten years is:

a. $5,332              b. $6,854                    c. $10,619                  d. 12,472

2.    A cash deposit has been made at the beginning of each year over five years in the following amounts: $500, $560, $640, $720, and $800. At 8%, after the five years, this is worth:

a. $4,006              b. $3,685                    c. $7,546                    d. $4,987

3.    Your parents bought their lakeside summer home for $60,000 ten years ago. It now sells for $242,700. The annual rate of return associated with the growth in the value of their home is: a. 5%      b. 10%                        c. 15%                        d. 20%

4.    An investment should generate $50,000 per year at the end of each of the next five years. If the current interest rate associated with an investment of this risk class is 12%, then the maximum you would be willing to pay for this investment is:

a. $250,000          b. $317,642                c. $180,240                d. $154,330

5.    Using 7.25%, the annual annuity payment associated with a repayment on a $24,000, 5 year loan is:

a. $5,892.61         b. $7,564.25               c. $3,2457.87             d. $4, 523.43

6.    Your target is to have $120,000 for your daughter's college tuition. If you begin saving today equal amounts per year for 14 years at 8%, how much will you need to save per year?

a. $8,571.43         b. $6,574.32               c. $4,955.62               d. $3,435.54

7.    You want to retire in 30 years as a millionaire. If 12% is an annual effective return on a stock portfolio during this time period, then how much should you invest per month on an ordinary annuity basis?

a. $286.13            b. $564.85                  c. $895.65                  d. $1,235.50