A ten-year loan will be repaid with payments at the end of each year. Each of the first five payments is 1000 and each of the next five payments is 2000. Interest on the loan is charged at an annual effective rate of 10%.

Calculate the total interest paid in the first five payments.

• 2418
• 2646
• 2978
• 4083
• 4249

Four annual tuition payments of 25,000 are to be paid at a future date. The payments will be funded by investing 1000 at the beginning of each month. The last deposit will be made six months before the first tuition payment. Interest is payable at a nominal interest rate of 6% convertible monthly.

Calculate the minimum number of monthly deposits required to fund the total tuition.

• 70
• 71
• 73
• 74
• There is not enough information to calculate the minimum number of monthly deposits.

A loan of 10,000 is being repaid by payments of 1,000 at the end of each quarter for as long as necessary, plus a drop payment. The annual nominal rate of interest on the loan is 16% convertible quarterly.

Calculate the amount of interest in the tenth payment.

• 112
• 146
• 179
• 233
• 281

A five-year loan has an annual nominal interest rate of 30%, convertible monthly. The loan is scheduled to be repaid with level monthly payments of 500, beginning one month after the date of the loan.

The borrower misses the thirteenth through the eighteenth payments, but increases the next six payments to X so that the final 36 payments of 500 will repay the loan.

Calculate X.

• 1070
• 1075
• 1080
• 1150
• 1160

A loan for 10,000 is to be repaid by level annual payments at the end of each year for ten years. The annual effective interest rate for the loan is 10%, which the bank uses to compute the annual payment and the balance on the loan at the end of each year. However, for balances during each year, the bank uses an annual simple interest rate of 10%.

Calculate the balance of the loan halfway through the fourth year.

• 7434
• 7442
• 7885
• 8310
• 8319

A loan of 10,000 is repaid at an annual effective interest rate of 8%, with equal payments made at the end of each year for ten years. The lender immediately deposits each payment into an account earning an annual effective interest rate of 10%.

Calculate the total amount of interest earned by the lender during the term of the loan.

• 11,589
• 13,576
• 13,751
• 14,191
• 14,903

A worker is starting an endowment fund for his charity. The fund will accumulate at a nominal annual interest rate of 12% convertible monthly. Beginning today, the worker will deposit 500 monthly for ten years. No deposits or withdrawals will be made for the subsequent ten years. Exactly twenty years from today, monthly payments of X will be made to his charity and continue forever.

Calculate X.

• 3270
• 3572
• 3758
• 3796
• 3834

Payments of 1000 at the end of each year are paid on a loan of 12,000. The payments are based on an annual effective interest rate of 10%.

Calculate the outstanding loan balance immediately after the 12 th payment

• 3270
• 3572
• 3758
• 3796
• 3834

A college has a scholarship fund that pays a sum of money twice a year. The scholarship will pay out 500 at the end of six months and another 500 at the end of one year. Every year thereafter, the two semi-annual payments will be increased by 10. For example, in year two, both payments will be 510 and in year three both payments will be 520. The scholarship fund earns interest at an annual effective interest rate of 7.5%.

Calculate the fund balance needed today to provide this scholarship indefinitely.

• 16,000
• 16,589
• 16,889
• 17,134
• 17,200

A mortgage for 125,000 has level payments at the end of each month and an annual nominal interest rate compounded monthly. The balances owed immediately after the first and second payments were 124,750 and 124,498, respectively.

Calculate the number of payments needed to pay off the mortgage.

• 198
• 199
• 200
• 201
• 202