Question

How much will $500 be worth thirty years from now earning a 1% interest with quarterly compounding? (Points : 7)        $671.00        $667.73        $17,392.45        $674.68        $1,650.19        $505.00        $69,870.71        $115,019.34        none of the above

Question 7.7. Your first home costs one hundred and seventy thousand dollars. You put down 10% and finance the rest with a loan from the local branch of the Farm Service Agency. Suppose the FSA charges you two points. What do the points cost you in dollars? (Points : 7)        $3,060.00        $2,998.80        $3,400.00        $15,300.00        $17,000.00

Question 8.8. Suppose a farmer deposits $10,000 today in a saving account at his/her local bank paying 3% interest compounded annually. How much would this farmer have after 7 years? (Points : 7)        $8,130.92        $10,300.00        $12,100.00        $12,250.43        $12,298.74        $8,162.98        $9,708.74        $10,001.07        none of the above

Question 9.9. Suppose Mr. Brook owes Mrs. Apple $1,750 due in a single payment in 3 years. How much should Mrs. Apple be willing to accept now from Mr. Brook if she can earn 5% compound interest on her money? (Points : 10)        $1,511.72        $1,587.30        $1,601.50        $2,025.84        $1,662.50        none of the above

Answer 1

Question 6)

	A/c balance after 30 years	PV×(1+r)^n
	Here,
1	Interest rate per annum	1.00%
2	Number of years	30
3	Number of compoundings per per annum	4
1÷3	Interest rate per period ( r)	0.25%
2×3	Number of periods (n)	120
	Present value (PV)	$                               500
	A/c balance after 30 years	$                         674.68
		500*(1+0.25%)^120