# MC#6

### 50 terms by melissabecker

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C. \$142,576.

C. \$37,205.

B. \$78,941.

D. \$330,560.

B. \$41,874.

A. \$41,556.

A. \$7,096.

C. \$23,616.

D. \$878,611.

A. \$26,662.

B. \$25,886.

C. \$30,139.

B. 10 years.

A. 15 years.

A. \$23,586.

A. \$55,379.

B. \$400,000.

### Reba wishes to know how much would be in her savings account if she deposits a given sum in an account and leaves it there at 6% interest for five years. She should use a table for the: A. Future value of an ordinary annuity of 1.

B. Future value of 1.

D. \$338,496.

B. \$6,499.

D. \$2,006.

B. \$29,924.

A. \$10,699.

B. \$13,523.

C. \$118,690.

C. \$1,847,950.

B. \$10,238.

B. \$123,918.

D. \$3,387,590.

A. \$858.

C. \$125,257.

### A series of equal periodic payments that starts more than one period after the agreement is called:

D. A deferred annuity.

### A series of equal periodic payments in which the first payment is made one compounding period after the date of the contract is:

B. An ordinary annuity.

### Loan A has the same original principal, interest rate, and payment amount as Loan B. However, Loan A is structured as an annuity due, while Loan B is structured as an ordinary annuity. The maturity date of Loan A will be:

A. Earlier than Loan B.

### Yamaha Inc. hires a new chief financial officer and promises to pay him a lump sum bonus four years after he joins the company. The new CFO insists that the company invest an amount of money at the beginning of each year in a 7% fixed rate investment fund to insure the bonus will be available. To determine the amount that must be invested each year, a computation must be made using the formula for:

C. The future value of an annuity due.

### Zulu Corporation hires a new chief executive officer and promises to pay her a signing bonus of \$2 million per year for 10 years, starting five years after she joins the company. The liability for this bonus when the CEO is hired:

A. Is the present value of a deferred annuity.

### Which of the following must be known to compute the interest rate paid from financing an asset purchase with an annuity?

B. Present value of the annuity, dollar amount and timing of the annuity payments.

C. \$72,867.

B. \$57,737.

C. \$69,035

C. \$74,891.

### Loan C has the same principal amount, payment amount and maturity date as Loan D. However, Loan C is structured as an annuity due while Loan D is structured as an ordinary annuity. Loan C's interest rate is:

A. Higher than Loan D.

### Tammy wants to buy a car that costs \$10,000 and wishes to know the amount of the monthly payments, which will be made at the first of the month, with interest of 12% on the unpaid balance. She should use a table for the:

C. Present value of an annuity due of 1.

### George Jones is planning on a cruise for his 70th birthday party. He wants to know how much he should set aside at the beginning of each month at 6% interest to accumulate the sum of \$4,800 in five years. He should use a table for the:

B. Future value of an annuity due of 1.

### Sandra won \$5,000,000 in the state lottery which she has elected to receive at the end of each month over the next thirty years. She will receive 7% interest on unpaid amounts. To determine the amount of her monthly check, she should use a table for the:

C. Present value of an ordinary annuity of 1.

### Koko Company pays \$10 million at the beginning of each year for 10 years to Mocha Inc. for a building with a fair value of \$75 million. What interest rate is Mocha earning on financing this land sale?

B. Between 7% and 8%.

D. 9 years.

D. \$191,852.

C. \$1,834.

A. \$15,783,077.

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