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

Multiple-choice exercise

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Suppose you win a lottery that entitles you to receive $800 per month for the next 30 years. If money is worth 6% compounded monthly, what is the present value of this annuity?

$133,433.29

$963,612.03

$22,235.24

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

In order to buy a new house, a family obtains a mortgage of $220,000 for 30 years at 6.9% compounded monthly. What are the monthly payments?

$1448.92

$8005.02

$15,180

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

If the monthly payment on a home mortgage of $300,000 made at 9% compounded monthly is $2699.18 for 20 years, how much interest is paid over the life of the loan?

$347,803.20

$246,016.40

$540,000

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

A loan of $5000 is being paid off in equal quarterly payments for 3 years. If the interest rate is 12% compounded quarterly, find the amount of each quarterly payment.

$502.31

$2081.74

$352.31

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

A credit card balance of $10,000 is being paid off with monthly payments of $500. The interest rate is 1.5% per month. What is the unpaid balance after the first monthly payment is made?

$9650

$9500

$9507.50

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