Please print test paper MAT137 Final Exam (Spring 2021).pdf …

Please print test paper MAT137 Final Exam (Spring 2021).pdf   You may neatly copy and show all work on paper if you don’t have access to a printer. Final exam must be completed in one sitting. You only have 1 attempt to complete this exam. Please scan and upload exam paper using link provided below. 

The real risk-free rate of interest is 1 percent.  Inflation…

The real risk-free rate of interest is 1 percent.  Inflation is expected to be 5 percent this  coming year, jump to 6 percent next year, and increase to 7 percent the year after (Year 3).   According to the expectations theory, what should be the interest rate on 2-year, risk-free  securities today?

The Howe family recently bought a house.  The house has a 30…

The Howe family recently bought a house.  The house has a 30-year,  $225,425.00 mortgage with monthly payments and a nominal interest rate of 4 percent.  What is the total dollar amount of interest the family will pay  during the first 2 years of their mortgage?  (Assume that all  payments are made at the end of the month.)

Terry Austin is 30 years old and is saving for her retiremen…

Terry Austin is 30 years old and is saving for her retirement.  She is planning  on making 36 contributions to her retirement account at the beginning of  each of the next 36 years.  The first contribution will be made today  (t = 0) and the final contribution will be made 35 years from today (t = 35). The retirement account will earn a return of 5.7 percent a year.  If each  contribution she makes is $1,572.00 how much will be in the retirement account 35 years from now (t = 35)?

You are considering buying a new car.  The sticker price is…

You are considering buying a new car.  The sticker price is $27,741.00 and  you have $2,267.00 to put toward a down payment.  If you can negotiate a  nominal annual interest rate of 8.4 percent and you wish to pay for the  car over a 6-year period, what are your monthly car payments?

You are considering buying a new car.  The sticker price is…

You are considering buying a new car.  The sticker price is $34,942.00 and  you have $2,427.00 to put toward a down payment.  If you can negotiate a  nominal annual interest rate of 8.8 percent and you wish to pay for the  car over a 4-year period, what are your monthly car payments?