2024 – The furniture store offers you no money down on a new set of living

The furniture store offers you no-money down on a new set of living room furniture. Further, you may pay for the furniture in 3 equal annual end of the year payments of $1,000 each with the first payment to me made 1 year from today. If the discount rate is 6%, what is the present value of the furniture payments?
Question 1 options:
A) $3183.60
B) $3000.00
C) $2,833.39
D) $2,673.01
Question 2 (3.3333 points)
Question 2 Saved
Your company just sold a product with the following payment plan: $50,000 today, $25,000 next yesar and $10,000 the following year. If your firm places the payments into an account earning 10% per year, how much money will be in the account after collecting the last payment?
Question 2 options:
A) $99,000
B) $98,000
C) $88,500
D) $85,000
Question 3 (3.3333 points)
Question 3 Saved
You are saving money for a down payment on a new home. You intend to place $5,000 at the end of each year for 3 years into an account earning 6% per year. At the end of the fourth year, you will place $10,000 into this account. How much money will be in the account at the end of the 4th year?
Question 3 options:
A) $26,873.08
B) $26,518.17
C) $25,918.00
D) $25,000.00
Question 4 (3.3333 points)
Question 4 Saved
A/An _______ is a series of equal end of the year cash flows.
Question 4 options:
A) ordinary annuity
B) annuity due
C) perpetuity due
D) ordinary perpetuity
Question 5 (3.3333 points)
Question 5 Unsaved
Which is greater, the present value of a $1,000 5-year ordinary annuity discounted at 10%, or the present value of a $1,000 5-year annuity due discounted at 10%?
Question 5 options:
A) The ordianry annuity is worth more with a present value of $3,790.79
B) The annuity due is worth more with a present value of $4,169.87
C) The ordinary annuity is worth more with a present value of $4,169.87
D) none of the above
Question 6 (3.3333 points)
Question 6 Unsaved
You just won the lottery! Your parents have already told you to plan for the future, so since you already have a well-paying job you decide to invest rather than spend you lottery winnings. The payment schedule of exactly $100,000 after taxes in equal annual end-of-year installments into your account paying 7% compounded annually. How much money will be in your account after the last deposit is made?
Question 6 options:
A) $2,000,000.00
B) $3,637,896.48
C) $4,099,549.23
D) $4,486,517.68
Question 7 (3.3333 points)
Question 7 Unsaved
What is thre future value in year 12 of an ordinary annuity cash flow of $6,000 per year at an interest rate of 4% per year.
Question 7 options:
A) $90,154.83
B) $93,761.02
C) $28,675.97
D) $32,117.08
Question 8 (3.3333 points)
Question 8 Unsaved
If for the next 40 years you place $3,000 in equal year-end deposits into an account earning 8% per year, how much money will be in the account at the end of that time period?
Question 8 options:
$120,000.00
$777,169.56
$839,343.12
$2,606,942.58
Question 9 (3.3333 points)
Question 9 Saved
Your employer has agreed to place year-end deposits of $1,000, $2,000 and $3,000 into your retirement account. The $1,000 will be one year from today. If your account earns 5% per year, how much money will you have in the account at the end of year 3 when the last deposit is made?
Question 9 options:
A) $5,357.95
B) $6,000
C) $6,202.50
D) $6,727.88
Question 10 (3.3333 points)
Question 10 Unsaved
Johnson has an annuity due that pays $600 per year for 15 years. What is the value of the cash flows 15 years from today if they are placed in an account that earns 7.5%.
Question 10 options:
A) $9,000.00
B) $9,675.00
C) $15,671.02
D) $16,846.35
Quiz 2 Chapter 5
Question 11 (3.3333 points)
Question 11 Saved
Suppose you postpone consumption and invest at 9% when the inflation rate is 3%, What is the approximate real rate on your reward for saving?
Question 11 options:
2%
3%
5%
6%
Question 12 (3.3333 points)
Question 12 Unsaved
Assume that you are willing to postpone consumption today and buy a certificate of deposit at you local bank. Your reward for postponing consumption implies that at the end of the year ____.
Question 12 options:
A) you will be able to buy fewer goods in the future
B) you will be able to buy the same amount of goods in the future
C) you will be able to buy the same amount of services in the future
D) you will be able to buy more goods in the future
Question 13 (3.3333 points)
Question 13 Saved
The number of periods for a consumer loan (n) is equal to the __________.
Question 13 options:
A) number of years times compounding periods per year
B) number of years
C) number of years in a period
D) number of compounding periods