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Al obtained a mortgage of $195,000 at 5.25 percent for 15 years. How much of the second monthly payment is applied to interest? 


A) $850.00 
B) $852.09 
C) $849.16 
D) $853.13 
E) $848.08 

F) A) and D)
G) C) and D)

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An annuity that pays $12,500 a year at an annual interest rate of 5.45 percent costs $150,000 today. What is the length of the annuity time period? 


A) 25 years 
B) 18 years 
C) 15 years 
D) 20 years 
E) 22 years 

F) D) and E)
G) A) and D)

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What is the EAR of 18.9 percent compounded continuously? 


A) 19.06 percent 
B) 20.80 percent 
C) 19.43 percent 
D) 19.89 percent 
E) 21.38 percent 

F) A) and B)
G) B) and D)

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Jogging Gear is considering a project with an initial cash requirement of $238,400. The project will yield cash flows of $4,930 monthly for 65 months. What is the rate of return on this project? 


A) 9.97 percent 
B) 11.38 percent 
C) 14.28 percent
D) 13.41 percent
E) 10.56 percent 

F) B) and E)
G) All of the above

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You want to start a business that you believe can produce cash flows of $5,600, $48,200, and $125,000 at the end of each of the next three years, respectively. At the end of three years you think you can sell the business for $250,000. At a discount rate of 16 percent, what is this business worth today? 


A) $258,803.02 
B) $314,011.33 
C) $280,894.67 
D) $325,837.81
E) $297,077.17 

F) C) and D)
G) B) and E)

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