# Finance

Shady Investment Company offers an investment that promises to double your money in 15 months. This investment promises to credits interest to your account every quarter. What quarterly rate must the investment earn to meet the promised return?

a. 22.59

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b. 14.87

c. 59.48

d. 36.99

Loan Shark Company provides short term loans. They will loan you \$4 today and expect \$5 back in one week! What is the APR for this loan?

a. 25%

b. 1,300%

c. 1,125%

d. 125%

Loan Shark Company provides short term loans. They will loan you \$4 today and expect \$5 back in one week! What is the EAR for this loan?

a. 1,300,000.00%

b. 67,600.00%

c. 10,947,544.25%

d. 875,287.42%

Recently, the Islanders signed Rick DiPietro to a 15 year contract. The contract is for equal payments of \$4.5 million each year for the next 15 years. If you assume a 10 percent discount rate, what is the true value (i.e. PV) of this contract?

a. \$85 million

b. \$34 million

c. \$67.5 million

d. \$143 million

Recently, the Islanders signed Rick DiPietro to a 15 year contract. The contract is for equal payments of \$4.5 million each year for thenext 15 years. If you assume a 10 percent discount rate, what is the future value of this contract?

a. \$67.5 million

b. \$34 million

c. \$143 million

d. \$85 million

You plan to retire with \$500,000 savings. You can make a deposit of \$150 per month into a retirement saving account that pays 12 percent annual interest compounded monthly. How many years will you have to wait to retire?

a. 98 years

b. 30 years

c. 18 years

d. 277 years

You plan to retire with \$500,000 savings. How much should you deposit annually into a retirement saving account that pays 10 percent annual interest if you plan to retire in 15 years?

a. \$47,258

b. \$15,737

c. \$33,333

d. \$18,415

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