Question 1

City Peewee League borrowed $883,212,and must make annual year-end payments of $120,000 each.If City's interest rate is 6%,how many years will it take to pay off the loan?

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Question 2

A company borrows money from the bank by promising to make 8 semiannual payments of $9,000 each.How much is the company able to borrow if the interest rate is 10% compounded semiannually?

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Question 3

Mason Company has acquired a machine from a dealer that requires a payment of $45,000 at the end of five years.This transaction includes interest at 8%,compounded semiannually.What is the value of the machine today?

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Question 4

A company is beginning a savings plan to purchase a new building.It will be saving $43,000 per year for the next 10 years.How much will the company have accumulated after the tenth year-end deposit,assuming the fund earns 9% interest?

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Question 5

Protocol Company has acquired equipment from a dealer that requires equal payments of $12,000 at the end of each of the next five years.This transaction includes interest at 9%,compounded annually.What is the value of the machine today?

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Question 6

Trey has $105,000 now.He has a loan of $175,000 that he must pay at the end of 5 years.He can invest his $105,000 at 10% interest compounded semiannually.Will Trey have enough to pay his loan at the end of the 5 years?

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Question 7

A company is creating a fund today by depositing $65,763.The fund will grow to $90,000 after 8 years.What annual interest rate is the company earning on the fund?

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Question 8

A company is beginning a savings plan.It will be saving $15,000 per year for the next 10 years.How much will the company have accumulated after the tenth year-end deposit,assuming the fund earns 10% interest?

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Question 9

A company borrows money from the bank by promising to make 6 annual year-end payments of $27,000 each.How much is the company able to borrow if the interest rate is 9%?

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Question 10

You are little late planning your retirement,but are looking forward to retiring in 10 years.You expect to save $6,000 a year at an annual rate of 8%.How much will you have accumulated when you retire?

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Question 11

A company is setting aside $21,354 today,and wishes to have $30,000 at the end of three years for a down payment on a piece of property.What interest rate must the company earn?

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Question 12

When you reach retirement age,you will have one fund of $100,000 from which you are going to make annual withdrawals of $14,702.The fund will earn 6% per year.For how many years will you be able to draw an even amount of $14,702?

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Question 13

Giuliani Co.lends $524,210 to Craig Corporation.The terms of the loan require that Craig make six semiannual period-end payments of $100,000 each.What semiannual interest rate is Craig paying on the loan?

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Question 14

A company has $50,000 today to invest in a fund that will earn 7%.How much will the fund contain at the end of 8 years?

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Question 15

Jackson has a loan that requires a $17,000 lump sum payment at the end of four years.The interest rate on the loan is 5%,compounded annually.How much did Jackson borrow today?

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Question 16

Kelsey has a loan that requires a $25,000 lump sum payment at the end of three years.The interest rate on the loan is 5%,compounded annually.How much did Kelsey borrow today?

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Question 17

A company is setting up a sinking fund to pay off $8,654,000 in bonds that are due in 7 years.The fund will earn 7% interest,and the company intends to put away a series of equal year-end amounts for 7 years.What is the amount of the annual deposits that the company must make?

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Question 18

A company has $46,000 today to invest in a fund that will earn 4% compounded annually.How much will the fund contain at the end of 6 years?

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Question 19

Garcia Brass Fixtures is planning on replacing one of its machines in five years by making a one-time deposit of $20,000 today and four yearly contributions of $5,000 beginning at the end of year 1.The deposits will earn 10% interest.How much money will Garcia have accumulated at the end of five years to replace the machine?

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Question 20

________ is a borrower's payment to the owner of an asset for its use.

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Quiz 25: Time Value of Money