61.
If $120,000 is borrowed for a home mortgage, to be repaid at 9% interest over 30 years with annual payments of $11,680.36,
how much interest (as opposed to return of capital) is paid in the last year of the loan?
62.
$50,000 is borrowed, to be repaid in three equal, annual payments with 10% interest. Approximately how much principal is
amortized with the first payment?
63.
An amortizing loan is one in which:
64.
You’re ready to make the last of four equal, annual payments on a $1,000 loan with a 10% interest rate. If the amount of the
payment is $315.47, how much of that payment is accrued interest?
65.
What will be the monthly payment on a $75,000 30-year home mortgage at 1% interest per month?
66.
Your real estate agent mentions that homes in your price range require a payment of $1,200 per month for 30 years at 0.75%
interest per month. What is the size of the mortgage with these terms?
67.
Assume you are making $989 monthly payments on your amortized mortgage. The amount of each payment that is applied
to the principal balance:
68.
How much must be saved at the end of each year for the next 10 years in order to accumulate $50,000, if you can earn 9%
annually? Assume you contribute the same amount to your savings every year.
69.
Your retirement account has a current balance of $50,000. You plan to add $6,000 a year to the account for each of the next
30 years. Use a financial calculator or Excel to find what interest rate you need to earn in order to have $1,000,000 in the
account at the end of the 30 years. ?
70.
How much do you need when you retire to provide a $2,500 monthly check that will last for 25 years? Assume that your
savings can earn 0.5% a month.
71.
The present value of an annuity stream of $100 per year is $614 when valued at a 10% rate. By approximately how much
would the value change if these were annuities due?
72.
Approximately how much must be saved for retirement in order to withdraw $100,000 per year for the next 25 years if the
balance earns 8% annually, and the first payment occurs one year from now?
73.
You have just retired with savings of $1.5 million. If you expect to live for 30 years and to earn 8% a year on your savings,
how much can you afford to spend each year? Assume that you spend the money at the start of each year.
74.
How much can be accumulated for retirement if $2,000 is put aside at the end of each of the next 40 years? Assume that you
can earn 9% a year on your savings.
75.
If inflation in Wonderland was 3% per month in 2016, what was the annual rate of inflation?
76.
Assume your uncle recorded his salary history during a 40-year career and found that it had increased 10-fold. If inflation
averaged 4% annually during the period, then over his career his purchasing power:
77.
Real interest rates:
78.
On the day you retire you have $1,000,000 saved. You expect to live another 25 years during which time you expect to earn
6.19% on your savings while inflation averages 2.5% annually. Assume you want to spend the same amount each year in real
terms and die on the day you spend your last dime. What real amount will you be able to spend each year?
79.
What is the expected real rate of interest for an account that offers a 12% nominal rate of return when the rate of inflation is
6% annually?
80.
What happens over time to the real cost of purchasing a home if the mortgage payments are fixed in nominal terms and
inflation is in existence?
81.
What is the minimum nominal rate of return that you should accept if you require a 4% real rate of return and the rate of
inflation is expected to average 3.5% during the investment period?
82.
What APR is being earned on a deposit of $5,000 made 10 years ago today if the deposit is worth $9,848.21 today? The
deposit pays interest semiannually.
83.
An interest rate that has been annualized using compound interest is termed the:
84.
What is the effective annual rate of interest on a deposit that pays interest of 10% continuously compounded?
85.
What is the relationship between an annually compounded rate and the annual percentage rate (APR) which is calculated for
truth-in-lending laws for a loan requiring monthly payments?
86.
What is the APR on a loan that charges interest at the rate of 1.4% per month?
87.
If interest is paid m times per year, then the per-period interest rate equals the:
88.
If the effective annual rate of interest is known to be 16.08% on a debt that has quarterly payments, what is the annual
percentage rate?
89.
Would a depositor prefer an APR of 8% with monthly compounding or an APR of 8.5% with semiannual compounding?