Multiple choice

1. John House has taken a 20-year, $250,000 mortgage on his house at an interest rate of 6% per year. What is the value of the mortgage after the payment of the fifth annual installment?  

a. $128,958.41 

b. $211,689.53 

c. $141,019.50 

d. None of the above 

2. If the present value of $1.00 received n years from today at an interest rate of r is 0.3855, then what is the future value of $1.00 invested today at an interest rate of r% for n years?  

a. $1.3855 

b. $2.594 

c. $1.70 

d. Not enough information to solve the problem 

3. If the present value of $1.00 received n years from today at an interest rate of r is 0.621, then what is the future value of $1.00 invested today at an interest rate of r% for n years?  

a. $1.00 

b. $1.61 

c. $1. 621 

d. Not enough information to solve the problem 

4. If the future value of $1 invested today at an interest rate of r% for n years is 9.6463, what is the present value of $1 to be received in n years at r% interest rate?  

a. $9.6463 

b. $1.00 

c. $0.1037 

d. None of the above