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Jessie wrecked her car on the way to work and needs to purchase a $13,000 car...

  1. Jessie wrecked her car on the way to work and needs to purchase a $13,000 car to replace her damaged car. If Jessie makes annual payments on the loan and can get a loan at 6% for 5 years, what is the total amount of interest she will pay on the loan over the life of the loan?
    1. $13,000
    2. $3,086
    3. $15,430
    4. $2,430
  2. Sam plans to work for 20 more years before retiring at the age of 60. After retiring, he anticipates needing $70,000 each year during the 30 years of retirement. How much money does Sam need to put away each year (assuming an ordinary annuity) during the 20 years he is still working in order to adequately fund this retirement? (Assume that Sam will earn 10% on his investments during his working career and during this retirement).
    1. $659,884
    2. $13,221
    3. $12,284
    4. $11,521
    5. $643,291
  3. What is the present value of an annual cash flow of a $25,000 perpetuity from a donation to the CVTC foundation, if the foundation can invest the gift at a rate of 14%?
    1. $178,571
    2. $2,500
    3. $350,000
    4. $3,500

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jeff jeffy answered 1 year ago
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