Part 1 of 2 - Lesson 4 Questions 20.0/ 50.0 Points Question 1 of 40 0.0/ 2.5 Points When you pay off the principal and all of the interest at one time at the maturity date of the loan, we call this type of loan a(n): A. amortized loan. B. interest-only loan. C. discount loan. D. compound loan. Question 2 of 40 0.0/ 2.5 Points The furniture store offers you no-money-down on a new set of living room furniture. Further, you may pay for the furniture in three equal annual end-of-the-year payments of $1,000 each with the first payment to be made one year from today. If the discount rate is 6%, what is the present value of the furniture payments? A. $3,183.60 B. $3,000 C. $2,833.39 D. $2,673.01 Question 3 of 40 2.5/ 2.5 Points Your parents have an investment portfolio of $400,000, and they wish to take out cash flows of $50,000 per year as an ordinary annuity. How long will their portfolio last if the portfolio is invested at an annual rate of 4.50%? Use a calculator to determine your answer. A. 8 years B. 9.10 years C. 9.60 years D. 10.14 years Question 4 of 40 2.5/ 2.5 Points What is the present value of a lottery paid as an annuity due for 20 years if the cash flows are $250,000 per year and the appropriate discount rate is 7.50%? A. $5,000,000.00 B. $3,186,045.39 C. $2,739,769.55 D. $2,548,622.84 Question 5 of 40 0.0/ 2.5 Points What is the present value of a stream of annual end-of-the-year annuity cash flows if the discount rate is 0%, and the cash flows of $50 last for 20 years? A. Less than $1,000 B. Exactly $1,000 C. More than $1,000 D. This question cannot be answered because we have an interest rate of 0%. Question 6 of 40 2.5/ 2.5 Points If you borrow $100,000 at an annual rate of 8% for a 10-year period and repay with 10 equal annual end-of-the-year payments of $14,902.95, then you have just repaid what type of loan? A. Amortized loan B. Interest-only loan C. Discount loan D. Compound loan Question 7 of 40 0.0/ 2.5 Points What is the future value in Year 12 of an ordinary annuity cash flow of $6,000 per year at an interest rate of 4% per year? A. $90,154.83 B. $93,761.02 C. $28,675.97 D. $32,117.08 Question 8 of 40 0.0/ 2.5 Points Your firm intends to finance the purchase of a new construction crane. The cost is $1,500,000. How large is the payment at the end of Year 10 if the crane is financed at a rate of 8.50% as a discount loan? A. $228,611.56 B. $127,500 C. $3,391,475.16 D. There is not enough information to answer this question. Question 9 of 40 0.0/ 2.5 Points You just won the Publisher's Clearing House Sweepstakes and the right to 20 after-tax ordinary annuity cash flows of $163,291.18. Assuming a discount rate of 7.50%, what is the present value of your lottery winnings? Use a calculator to determine your answer. A. $3,265,823.60 B. $1,789,520.81 C. $1,664,670.52 D. There is not enough information to answer this question. Questi.