1. What is the possible amount you’d have to invest in a savings account at the beginning of each year to have $40,000 at the end of 8 years?
a) $5,000
b) $46,800
c) $8,400
d) $4,200
2. You calculated an ordinary annuity with n=5 and payments = $2,000 to have a present value of $10,000. You must have made an error and used a discount rate of:
a) 2%
b) 5%
c) 0%
d) 10%
3. You buy a car for $50,000, and your first monthly payment reduces the principal balance of your loan to $49,245.84. What is the possible amount of the principal reduction that takes place as a result of your second monthly payment?
a) $756.67
b) $750.22
c) $752.60
d) $754.16