Practice Quiz - Section 3-4 (Form B) - Present Value of an Annuity - Amortization

Multiple-choice exercise

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Suppose you win a lottery that entitles you to receive $1000 per month for the next 25 years. If money is worth 6% compounded monthly, what is the present value of this annuity?

$155,206.86

$892,993.96

$23,445.64

None of the answers given; click to see the solution.

In order to buy a new house, a family obtains a mortgage of $200,000 for 30 years at 8.4% compounded monthly. What are the monthly payments?

$1523.68

$7414.37

$16,800

None of the answers given; click to see the solution.

If the monthly payment on a home mortgage of $200,000 made at 9% compounded monthly is $1678.39 for 25 years, how much interest is paid over the life of the loan?

$303,517

$158,040.25

$450,000

None of the answers given; click to see the solution.

A loan of $10,000 is being paid off in equal quarterly payments for 7 years. If the interest rate is 12% compounded quarterly, find the amount of each quarterly payment.

$532.93

$2191.18

$232.93

None of the answers given; click to see the solution.

A credit card balance of $8000 is being paid off with monthly payments of $300. The interest rate is 1.5% per month. What is the unpaid balance after the first monthly payment is made?

$7820

$7700

$7704.50

None of the answers given; click to see the solution.