open-end loan

open-end loan

Paper instructions:
Ex. 3 & 4
Question 22 4 points Save
A patio furniture set sells for $935.00 on the installment plan which includes the finance charge. The payment plan calls for 15% down and the balance in 12 equal payments. The amount of each payment is:

$89.60
$77.92
$66.23
$140.25
none of the above
Question 23 4 points Save
An example of an open-end loan is a:

credit card loan
home mortgage loan
major appliance loan
car loan
none of the above
Question 24 4 points Save
The installment price minus the down payment equals the:

carrying charge
total of installment payments
cash price
net price
none of the above
Question 25 4 points Save
The __________ __________ is the sum of the number of months remaining on a loan divided by the sum of the total number of months of the loan.

refund fraction
Rule of 78
constant ratio
finance charge
none of the above

Question 1 4 points Save
The amount of interest on an ordinary annuity of $11,600.00 for 5 years at 8% compounded semiannually is:

$23,269.60
$116,000.00
$23,296.60
$139,269.60
none of the above
Question 2 4 points Save
Brian made deposits of $2,225.00 at the end of each year for eight years. The rate was 10% compounded annually. The value of Brian’s annuity at the end of eight years is:

$5,218.95
$17,800.00
$25,445.10
$10,178.04
none of the above
Question 3 4 points Save
__________ is the present value of an annuity of $1,500.00 for 6 years at 6% compounded semiannually.

$12,576.00
$7,375.50
$8,125.50
$14,931.00
none of the above
Question 4 4 points Save
Which of the following is not an example of the use of a sinking fund?

pay an installment loan
pay for equipment replacement
pay for a new factory
retire bonds
none of the above
Question 5 4 points Save
The payments for an annuity due are made:

annually
at the beginning of the period
at the end of the period
every month
none of the above
Question 6 4 points Save
An annuity is:

never used by lotteries
not made up of equal payments
a lump sum payment
a stream of payments
none of the above
Question 7 4 points Save
The sum of the payments of an annuity plus the interest is called the:

economic sum
payoff amount
financial total
amount of the annuity
none of the above
Question 8 4 points Save
The present value of an ordinary annuity:

determines the amount of money that needs to be invested today
represents a lump sum payment
is equal to the amount of money invested in the future
can be determined only using the tables
none of the above
Question 9 4 points Save
What is the value of an annuity due at the end of 15 years of quarterly deposits of $2,000.00 with terms of 8% compounded quarterly?

$228,102.00
$232,665.14
$232,666.08
$228,120.00
none of the above
Question 10 4 points Save
How much should be invested today to provide $1,800.00 in one year? Assume 10% interest compounded annually.

$1,636.36
$1,782.00
$1,620.00
$493.15
none of the above
Question 11 4 points Save
If interest is compounded, the total amount at the end of the loan or investment term is called the:

future value
compound amount
present value
both A and B
none of the above
Question 12 4 points Save
Interest compounding:

calculates interest periodically
is done only once a year
calculates the present when the future is known
results in less interest than simple interest
none of the above
Question 13 4 points Save
The effective rate is:

the stated rate
the true semiannual rate
the annual percentage yield rate
the nominal rate
none of the above
Question 14 4 points Save
Don deposited $27,500.00 in Trader’s Bank at an interest rate of 12% compounded quarterly. (Use Table 13-1 from the textbook.) The effective rate was:

14.0%
12%
13%
12.55%
none of the above
Question 15 4 points Save
$15,000.00 for 10 years compounded at 10% quarterly results in how many periods?

20
10
120
40
none of the above
Question 16 4 points Save
The amount that must be invested today to yield a desired sum in the future is called:

compound total
compound interest
present value
future value
none of the above
Question 17 4 points Save
The compound interest on a $3,000.00 loan at 7% for 3 years compounded annually is:

$3,675.13
$630.00
$3,630.00
$675.13
none of the above
Question 18 4 points Save
Using Table 13-2, determine what $4,500.00 for 5 years at 7.25% compounded daily will grow to.

$6,385.95
$6,465.89
$6,358.59
$6,835.59
none of the above
Question 19 4 points Save
Bill took out a $125,000.00 mortgage on a lake house. The bank charged 2 points at the closing. The points amounted to:

$750.00
$7,500.00
$2,500.00
$5,000.00
none of the above
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