John Doeber borrowed

$150,000 to buy a house. His loan cost was 6% and he promised to repay the loan

in 15 equal annual payments. What is the principal outstanding after the first

loan payment? 

10. 

Joe Nautilus has $210,000

and wants to retire. What return must his money earn so he may receive annual

benefits of $30,000 for the next 10 years? 

You will deposit $2,000

today. It will grow for 6 years at 10% interest compounded semiannually. You

will then withdraw the funds annually over the next 4 years. The annual

interest rate is 8%. Your annual withdrawal will be: 

Joe Nautilus has $210,000

and wants to retire. What return must his money earn so he may receive annual

benefits of $30,000 for the next 10 years. 

Increasing the number of

periods will increase all of the following except 

Mr. Darden is selling his

house for $200,000. He bought it for $164,000 ten years ago. What is the annual

return on his investment? 

The higher the rate used in

determining the future value of a $1 annuity, 

A dollar today is worth

more than a dollar to be received in the future because 

The shorter the length of

time between a present value and its corresponding future value, 

Mike Carlson will receive

$12,000 a year from the end of the third year to the end of the 12thyear (10

payments). The discount rate is 10%. The present value today of this deferred

annuity is: