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##### Finance Week 4 Sample Questions

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Question;Question 11.If you can double your money in 14 years, what is the implied annual rate of interest,given that compounded semi-annually? Note: give your answer in percentages. Note: Donot put % sign in your answer. Simply write the number in percentages in the answerbox.Question 21. What is the future value of quarterly payments of $674 for 18 years at 7 percent?Question 31. If you can double your money in 17 years, what is the implied annual rate of interest,given that compounded in quarterly? Note: give your answer in percentages. Note: Donot put % sign in your answer. Simply write the number in percentages in the answerbox.Question 41. What is the future value of annual payments of $7,466 for 14 years at 6 percent?Question 51. What should you be willing to pay in order to receive $549 annually forever, if yourequire 5% per year on the investment?Just enter the number up to 2 decimal points. Do not enter $ in the answer box.Question 61. How many years it will take to grow your money from $3,428 to $6,835 if you can earnan interest of 6% compounded quarterly? Note: Do not write "years" in your answer.Simply write the number in the answer box.Question 71. Kelly starting setting aside funds 8 years ago to buy some new equipment for her firm.She has saved $1,515 each quarter and earned an average rate of return of 9 percent.How much money does she currently have saved for this purpose?Question 81. How many years it will take you to double your money if you can earn 13% each year,given that compounding is quarterly? Note: Do not write "years" in your answer. Simplywrite the number in the answer box.Question 91. Assume interest rate of 5%. A company receives cash flows of $106,444 at the end ofyears 4, 5, 6, 7, and 8, and cash flows of $297,138 at the end of year 10. Compute thefuture value of this cash flow stream.Do not enter the symbol $ in your answer. Simply enter the answer rounded off to two decimalpoints.Question 101. What is the future value of $632 invested for 12 years at 10% if interest is compoundedquarterly? Note: Do not put $ sign in your answer. Simply write the number in the answerbox.Question 111. If the effective rate is 12%. What is the nominal rate if compounding is daily. Do notenter the symbol % in your answer. Simply enter the answer in percentages rounded offto two decimal points.Question 121. Today, you are purchasing a $3,881 10-year car loan at 13 percent. You will pay annuallyat the end of each year. What is the amount of each payment?Question 131. What is the future value of $10,360 for 14 years at 7 percent if interest is compoundedsemi-annually? Note: Do not enter "$" in your answer. Simply write down the numberthat you get as your answer.Question 141. Gertrude Carter and Co. has an outstanding loan that calls for equal annual payments of$14,903 over the 10-year life of the loan. The original loan amount was $100,000 at anAPR of 8 percent. How much of the third payment is interest?Do not enter the symbol $ in your answer. Simply enter the answer rounded off to two decimalpoints.Question 151. In order to buy a house, you take a loan of 100,000 at 7.5% for a period of 13 years.Compute the balance remaining at the end of 5 years.Do not enter the symbol $ in your answer. Enter your answer as a positive number. Simply enterthe answer rounded off to two decimal points.Question 161. How much do you need to invest today in order to have $8,048 at the end of 6 years ifyou are sure to earn an interest at the rate of 8%, if interest is compounded quarterly?Note: Do not put $ sign in your answer. Simply write the number in the answer box.Question 171. How much do you need to invest today in order to have $10,016 at the end of 13 years ifyou are sure to earn an interest at the rate of 4%? Note: Do not put $ sign in youranswer. Simply write the number in the answer box.Question 18Say, you deposit $2,035 in a bank for 15 years. What is the amount you will have in the bankat the end of 15 years if interest of 5 % compounded monthly for first 7 years and interest of10 % compounded quarterly for the remaining years? Note: Do not put $ sign in youranswer. Simply write the number in the answer box.Question 191. What is the future value of $4,515 invested for 18 years at 19% if interest iscompounded semi-annually? Note: Do not put $ sign in your answer. Simply write thenumber in the answer box.Question 201. Barrett Pharmaceuticals is considering a drug project that costs $177,695 today and isexpected to generate end-of-year annual cash flows of $14,677, forever. At whatdiscount rate would Barrett be indifferent between accepting and rejecting the project?Just enter the number in percentages up to 2 decimal points. Do not enter % in the answer box.Question 211. How many years it will take you to quadruple (means 4 times) your money if you canearn 7.14% each year? Note: Do not write "years" in your answer. Simply write thenumber in the answer box.1 pointsQuestion 221. What is the future value of $4,195 invested for 14 years at 13% if interest iscompounded semi-annually (twice a year)? Note: Do not put $ sign in your answer.Simply write the number in the answer box.Question 231. Assume interest rate of 6%. Suppose that you receive $97,408 at the end of each yearfor 4 years. Suppose that this cash flow starts at the end of the fourth year. Compute thepresent value.Do not enter the symbol $ in your answer. Simply enter the answer rounded off to two decimalpoints.Question 241.Say, you deposit $4,381 in a bank for 16 years. What is the amount you will have in thebank at the end of 16 years if interest of 4 % for first 7 years and interest of 6 % for theremaining years? Note: Do not put $ sign in your answer. Simply write the number in theanswer box.Question 251. If you can triple your money in 20 years, what is the implied rate of interest? Note: Donot put % sign in your answer. Simply write the number in percentages in the answerbox..Question 261. What is the effective rate of 16% compounded monthly?Do not enter the symbol % in your answer. Simply enter the answer in percentages rounded offto two decimal points.Question 271. How much do you need to invest today in order to have $1,829 at the end of 7 years ifyou are sure to earn an interest at the rate of 14%, if interest is compounded monthly?Note: Do not put $ sign in your answer. Simply write the number in the answer box.Question 281. The ABC Company is considering a new project which will require an initial cashinvestment of $12,842. The projected cash flows for years 1 through 4 are $6,128,$5,264, $8,811, and $4,632, respectively. If the appropriate discount rate is 12%,compute the NPV of the project.Enter your answer rounded off to two decimal points. Do not enter $ in the answer box.Question 291. The Perpetual Life Insurance Co is trying to sell you an investment policy that will payyou and your heirs $14,536 per year forever. Suppose the Perpetual Life Insurance Co.told you the policy costs $169,503. At what interest rate would this be a fair deal? Justenter the number in percentages up to 2 decimal points. Do not enter % in the answerbox.Question 301. How many months it will take to grow your money from $3,711 to $6,515 if you can earnan interest of 19% compounded monthly? Note: Do not write "months" in your answer.Simply write the number in the answer box.Question 311. How many years it will take to grow your money from $4,118 to $6,536 if you can earnan interest of 6% compounded monthly? Note: Do not write "years" in your answer.Simply write the number in the answer box.Question 321. If you receive $274 at the end of each year for the first three years and $956 at the endof each year for the next three years. What is the present value? Assume interest rate is7%.Hint: This is an uneven cash flow problem. Use the CF function and solve for NPV to get theanswer.Just enter the number up to 2 decimal points. Do not enter $ in the answer box.Question 331. Consider a 10-year loan with monthly payments at 10%. If the loan amount is $250,000,compute the Interest paid during the 6th year.Enter your answer rounded off to two decimal points. Do not enter $ in the answer box.Question 341. Assume interest rate of 4%. A company receives cash flows of $559 at the end of year 5,$242 at the end of year 7, and $962 at the end of year 10. Compute the future value ofthis cash flow stream.Do not enter the symbol $ in your answer. Simply enter the answer rounded off to two decimalpoints.Question 351. If you put $700 in a savings account with a 10% nominal rate of interest compoundedmonthly, what will the investment be worth in 21 months (round to the nearest dollar)?a. $828b. $770c. $833d. $1,176e. $827Question 361. The ABC Company is considering a new project which will require an initial cashinvestment of $5,268. The project will produce no cash flows for the first 5 years. Theprojected cash flows for years 6 through 9 are $6,362, $4,627, $4,076, and $6,748,respectively. If the appropriate discount rate is 4%, compute the NPV of the project.

Paper#50103 | Written in 18-Jul-2015

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