Question

1. Today is your 21^st birthday and you just decided to start saving money so you can retire early. Thus, you are going to save $500 a month starting one month from now. You plan to retire as soon as you can accumulate $1 million. If you can earn an average of 8% on your savings, how old will you be when you retire?
   1. 33.39 years
   2. 42.87 years
   3. 54.39 years
   4. 64.71 years

1. Travis is buying a car and will finance it with a loan that requires monthly payments of $265 for the next four years. His car payments can be described by which one of the following terms?
   1. Perpetuity
   2. Annuity
   3. Lump Sum
   4. PV Factor

1. The ABC Credit Corp offers credit to its credit card customers and charges interest of 1.2 percent per month. What is the effective annual rate?
   1. 15.39 per cent
   2. 14.61 percent
   3. 15.10 percent
   4. 15.51 percent

1. A firm has sales of $211,000, depreciation of $24,000, interest expense of $560, cost of goods sold of $148,900, other costs of $6,500, and a tax rate of 35%. What is the firm’s profit margin?
   1. 9.38%
   2. 11.01%
   3. 6.48%
   4. 9.56%

1. Goshen Industries has sales of $487,600, total equity of $367,700, a profit margin of 5.1 percent, and a debt-equity ratio of .34. What is the return on assets?
   1. 5.89 percent
   2. 5.05 percent
   3. 6.76 percent

Answer 1

1)

54.39 years

Time in years to achieve goal	=	400.72	/	12	=	33.39	Years
Current Age						21.00	Years
Goal achieved at the age of						54.39	Years
Working:
Number of period	=nper(rate,pmt,pv,fv)
	= 400.72 months
Where,
rate	=	8%/12	=	0.006666667
pmt			=	$            -500.00
pv			=	0
fv			=	$ 10,00,000.00