Question 1. An investor wishes to accumulate $25,000 in a fund at the end of 12 years. To accomplish this, the investor plans to make constant deposits at the end of each year, the final payment made one year prior to the end of the investment period. Determine the amount of each deposit if the fund earns an 8% effective rate.
(A) 1,220
(B) 1,317
(C) 1,391
(D) 1,471
(E) 1,502
Question 2 A loan of 20,000 is being repaid by 20 semi-annual payments, with the first payment made one-half year after the loan. The first ten payments are K each and the final ten payments are K+200 each. Find K if the effective annual interest rate is 12%.
(A) 1,480
(B) 1,548
(C) 1,553
(D) 1,573
(E) 1647
Question 3 A local car dealer is advertising the choice between 0% financing for 60 months or a $3,500 rebate using alternate financing. A buyer checks with her local credit union and can obtain alternate financing through her credit union at a 6% annual effective rate for 60 months. No down payment will be made under either offer and payments begin one month after purchase. Determine the price of the car at which the buyer is indifferent between the two offers.
(A) 25,379
(B) 26,002
(C) 26,198
(D) 26,842
(E) 26,998
Question 4. Annual deposits of 50 are made into a fund earning a 5% effective annual rate until the fund accumulates to 1,500. Find the loan payment required to pay off a 1,500 loan of the same duration and interest rate.
(A) 50
(B) 75
(C) 100
(D) 125
(E) 150
Question 5. An annuity immediate pays 10 for 10 years, then decreases by one per year for 9 years and pays one per year thereafter, forever. Determine the present value of this annuity assuming an annual effective interest rate of 8%.
(A) 87
(B) 89
(C) 92
(D) 95
(E) 97
Question 6. An amount of 10,000 is invested into a fund earning 12% annual interest. At the end of 5 years, monthly withdrawals of 400 commence and continue until the fund is exhausted. If the final payment is less than 400, find the total number of payments n and the approximate value of the last payment.
(A) n =57; last payment=135
(B) n =57; last payment=248
(C) n =58; last payment=131
(D) n =58; last payment=197
(E) n =58; last payment=241
Question 7. A perpetuity has a payment of 10 starting today, 10+X in one year, 10+2X in two years, 10+3X in three years, and so on. Assuming an effective annual rate Of 6%, the perpetuity can be purchased for 3,000. Find X to the neatest donor.
(A) 8
(B) 9
(C) 10
(D) 11
(E) 12
Question 8. An eighteen Year old receives an annuity on her birthday from her great uncle's estate paying 3,000 on her nineteenth birthday and subsequent payments that increase by $500 per year until age thirty-five. Find the value of the annuity on her eighteenth birthday assuming an interest rate of 7.25% compounded monthly.
(A) 53,352
(B) 55,241
(C) 58,071
(D) 59,299
(E) 62,789
Question 9. A purchaser pays 500,000 for a mine which will be exhausted at the end of 30 years. Find the required level annual revenue (received at the end of each year) in order for the purchaser to receive a 7% annual return on his investment if he can recover his principal in a sinking fund earning 4% per year.
(A) 37,400
(B) 37,594
(C) 39,130
(D) 39,200
(F) 39.368