You want to buy a new sports coupe for $84,500, and the finance office at the dealership has quoted you an APR of 5.2 percent for a 60-month loan to buy the car. What will your monthly payments be? What is the effective annual rate on this loan?

First National Bank charges 13.8 percent compounded monthly on its business loans. First United Bank charges 14.1 percent compounded semiannually. As a potential borrower, which bank would you go to for a new loan?

An investment will pay you $95,000 in 10 years. If the appropriate discount rate is 9 percent compounded daily, what is the present value?

The Maybe Pay Life Insurance Co. is trying to sell you an investment policy that will pay you and your heirs $40,000 per year forever. If the required return on this investment is 5.1%, how much will be the payment for the policy?

What is the future value of $3,100 in 17 years assuming an interest rate of 8.4 percent compounded semiannually?

Suppose you are still committed to owning a $245,000 Ferrari. If you believe your mutual fund can achieve an annual rate of return of$11.2$percent and you want to buy the car in$9$years (on the day you turn$30$), how much must you invest today?

What is the future value of $5,500 in 17 years at an APR of 8.4 percent compounded semiannually?

Spartan Credit Bank is offering 8.3 percent compounded daily on its savings accounts. If you deposit $7,500 today, how much will you have in the account in 5 years? In 10 years? In 20 years?

Live Forever Life Insurance Co. is selling a perpetuity contract that pays $1,500 monthly. The contract currently sells for$115,000. What is the monthly return on this investment vehicle? What is the APR? The effective annual return?

Big Dom’s Pawn Shop charges an interest rate of 27 percent per month on loans to its customers. Like all lenders, Big Dom must report an APR to consumers. What rate should the shop report? What is the effective annual rate?

An investment will pay you $80,000 in 10 years. If the appropriate discount rate is 9 percent compounded daily, what is the present value?

Christie, Inc., has identified an investment project with the following cash flows. If the discount rate is 6 percent, what is the future value of these cash flows in Year 4? What is the future value at a discount rate of 13 percent? At 27 percent?

The Maybe Pay Life Insurance Co. is trying to sell you an investment policy that will pay you and your heirs $35,000 per year forever. If the required return on this investment is 4.7 percent, how much will you pay for the policy?

You want to have $60,000 in your savings account 12 years from now, and you’re prepared to make equal annual deposits into the account at the end of each year. If the account pays 6.4 percent interest, what amount must you deposit each year?