Question

1. South Bend Trucking is purchasing several new trucks for its fleet. The Company will borrow $665,112 to make the purchase. If South Bend plans to repay the loan in 10 equal, annual payments with the first payment occurring one year from today, and if their annually compounded interest rate is 8.2%, what is the amount of each payment to the nearest whole dollar?

5 points   

QUESTION 92

1. You wish to retire in 37 years with annual retirement income from your savings of $109,126 per year. You expect to draw this annual payment for 22 years. How much to the nearest whole dollar must you contribute to your retirement savings each year in order to be able to withdraw $109,126 during retirement if your retirement savings will earn 12.3% per year between now and when you retire, and 8.5% per year after you retire?

5 points   

QUESTION 93

1. Assume that the expectations theory holds, and that liquidity and maturity risk premiums are zero. If the annual rate of interest on a 2-year Treasury bond is 11.5 percent and the rate on a 1-year Treasury bond is 13.5 percent, what rate of interest should you expect on a 1-year Treasury bond one year from now? Calculate your answer using the geometric average. State your answer as a percentage to 2 decimal places (i.e. xx.xx)

Answer 1