# BUSN 379 Week 2 Quiz

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## BUSN 379 Week 2 Quiz

 1 Question : (TCO 3) You have been approved for a \$70,000 loan toward the purchase of a new home at 10% interest. The mortgage is for 30 years. How much are the approximately annual payments of the loan? Hint: Assume you pay yearly.
 Student Answer: \$7425 \$8690 \$5740 None of the above
 2 Question : (TCO 3) First Choice Bank pays 9% APR compounded quarterly on its business loans. National Emerald Bank pays 19% APR compounded semiannually. The EAR for First Choice and National Emerald Bank are:
 Student Answer: 9.31% and 19.90%, respectively 9% and 19.50%, respectively 9.31% and 19.50%, respectively 9% and 19.90%, respectively
 3 Question : (TCO 3) ABC Electronics is considering an investment that will have cash flows of \$16,000, \$5,000 and \$4,000 for years 1 through 3. What is the approximate value of this investment today if the appropriate discount rate is 9% per year?
 Student Answer: \$23,250 \$27,250 \$21,970 None of the above
 4 Question : (TCO 3) Which of the following will increase the total amount of interest earned on an investment assuming that all interest is reinvested? Select all answers that apply:
Student Answer:increasing the frequency of the interest payments
decreasing the frequency of the interest payments
increasing the interest rate
decreasing the interest rate

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 5 Question : (TCO 3) If you borrow \$50,000 today at 10% interest for eight years. How much of your second payment will be applied towards the principal of the loan?
 Student Answer: \$5,000 \$4,372 \$4,809 can not be determined with the information given

 6 Question : (TCO 3) Match the following terms with the examples as appropriate:
 7 Question : (TCO 3) You are interested in saving to buy a new machine that costs \$1,105. You can deposit \$250 in your bank today. If your bank pays 8% annual interest on its accounts, how long will it take you to save for the new machine?