1. You can afford to pay $500 per month for a car loan. You plan to borrow for 5 years at 9% interest. How much can you borrow for your new car?
A) 28,250.00
B) 37,712.00
C) 24,086.00
D) 30,000.00
2. You receive a royalty payment on a book you wrote. The payment is equal to $5,000 per year and is forecast to continue for 10 years. At a 9% discount rate, how much is this stream of payments worth today?
A) 75,964.00
B) 32,088.00
C) 22,350.00
D) 50,000.00
3. How much money can you borrow if you can afford a payment of $800 per month for 30 years at 7% interest?
A) 288,000.00
B) 120,246.00
C) 155,255.00
D) 975,976.00
4. How much money will you have if you invest $500 per MONTH for 25 years, earning a 12% annual rate of return?
A) 46,759.00
B) 14,121.00
C) 939,423.00
D) 756,890.00