Annual Percentage Rate

Topics: Net present value, Rate of return, Investment Pages: 3 (792 words) Published: March 9, 2013
Which one of the following statements is correct concerning annual percentages rates (APRs)? Answer: The APR is equal to the monthly interest rate multiplied by 12

Give an interest rate of zero percent, the future value of a lump sum invested today will always: Answer: remain constant

Answer: II and IV

A firm created as a separate and distinct legal entity that may be owned by one or more individuals or entities is called a: corporation
The capital structure of a firm refers to the firm’s: Long-term debt and equity

The Anderson Co. wants to borrow 5000 at the beginning of each year for six years at 7 percentage interest. The firm will repay this money in one lump sum at the end of year 6. How much of the firm’s loan repayment id due to the 5000 it received in year 4? Answer: 6125.22

Tayor has just received an insurance settlement of 58400. She want to save this money until her oldest daughter goes to college. Tayor can earn of 8.5 percent, compound annually, on this monty. How much will she saved for her daugther’s college education if her enters college 14 years from now? 182990.77

Warren’s diner needed a new location. This establishment spent 65000 to refurbish an old shop and create the current facility. The firm borrowed 75 percent of the refurbishment cost at 8 percent interest for 11 years. What is the amount of each monthly payment? 556.5

How much money does Melinda need to deposit into her investment account today if she wishes to withdraw 8000 a year for twenty years? She expects to earn an average rate of return of 8.5 percent. Answer: 75706.69

You want to retire early so you know you must start saving money. Thus, you have decided to save 4500 a year, start at age 25. You plan to retire as soon as you can accumulate 500,000. If you can earn an average of 11 on how old will you be when you retire? Answer;49.74

The primary goal of financial management is to maximize the: the correct answer is market value of the existing...
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