Self-Evaluation Exercise - Texas Instruments BA II Plus User Manual

Self-Evaluation Exercise

Question 1. You borrow $75,000 to buy a house and agree to repay the loan in 20 years at
an interest rate of (6.5%, 2). How much lower would your monthly payment be
with a (6%, 2) interest rate
a) $555.38
b) $534.15
c) $21.24
d) $24.21
e) $34.24
Question 2. What nominal rate, compounded semi-annually, lets you double your capital in
ten years (rounded off)?
a) 6%
b) 7%
c) 8%
d) 9%
e) 10%
Question 3. You are thinking about purchasing a $10,000 bond maturing at par in nine
years with annual coupons at the rate of 7%. How much will you have to pay if
you want a compound annual return of 8%?
a) $4,372.82
b) $9,002.49
c) $9,375.31
d) $10,000.00
e) $10,375.31
?
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