Week four Fian
1) At what rate must $400 be compounded annually for it to grow to $716.40 in 10 years?
- A) 6%
- B) 5%
- C) 7%
- D) 8%
2) You just purchased a parcel of land for $10,000. If you expect a 12% annual rate of return on your investment, how much will you sell the land for in 10 years?
- A) $25,000
- B) $31,060
- C) $38,720
- D) $34,310
3) If you place $50 in a savings account with an interest rate of 7% compounded weekly, what will the investment be worth at the end of five years (round to the nearest dollar)?
- A) $72
- B) $70
- C) $71
- D) $57
4) Shorty Jones wants to buy a one-way bus ticket to Mule-Snort, Pennsylvania. The ticket costs $142, but Mr. Jones has only $80. If Shorty puts the money in an account that pays 9% interest compounded monthly, how many months must Shorty wait until he has $142 (round to the nearest month)?
- A) 73 months
- B) 75 months
- C) 77 months
- D) 79 months
5) If you want to have $1,700 in seven years, how much money must you put in a savings account today? Assume that the savings account pays 6% and it is compounded quarterly (round to the nearest $10).
- A) $1,120
- B) $1,130
- C) $1,110
- D) $1,140
6) If you want to have $1,200 in 27 months, how much money must you put in a savings account today? Assume that the savings account pays 14% and it is compounded monthly (round to the nearest $10).
- A) $910
- B) $890
- C) $880
- D) $860
7) You bought a painting 10 years ago as an investment. You originally paid $85,000 for it. If you sold it for $484,050, what was your annual return on investment?
- A) 47%
- B) 4.7%
- C) 19%
- D) 12.8%
8) You deposit $5,000 today in an account drawing 12% compounded quarterly. How much will you have in the account at the end of 2 1/2 years?
- A) $7,401
- B) $5,523
- C) $7,128
- D) $6,720
9) How many years will it take for an initial investment of $200 to grow to $544 if it is invested today at 8% compounded annually?
- A) 8 years
- B) 10 years
- C) 11 years
- D) 13 years
10) If you purchased a share of Mico.com stock on March 1, 1993 for $45 and you sold the stock at $168 on February 28, 1998, what was your annual rate of return on the stock?
- A) 83%
- B) 75%
- C) 20%
- D) 30%
- E) 50%
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xx xx xxxx rate xxxx $400 be compounded xxxxxxxx for it xx grow to $716.40 xx xx years?
xx xx
- B) 5%
xx xx
xx 8%
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Submitted by Adept Gyst on Thu, 2016-07-21 03:48
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Week four Fian
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assignment xxxxxxxxx
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Week Four xxxxxxx xxx
Question x
xxxxxxx xxx xx x PV (1+r)^n Where FV is xxx future xxxxxx xx xx the present value, x xx xxx interest xxx x = xxxxxx xx xxxxxxxxxxx periods,
xx xxxx some of xxxxx values xxxxxxxxxxx = $716.40 PV = xxxxxx x 10 Plug xxxx xxx
xxxxxx = xxxxxx + r) xx
xxxxx for xx
xxxxx = (1 + r)10
1.7910.1 = xxxx x xxx
r = 0.06009014
xx xxxxxxxxx
xx 6% (rounded)
xxxxxxx A
xxxxxxxx 2
The formula for calculating xxx future value xx FV=PV(1+r)^ x
xxxxx PV xx xxx present value,r xx xxx interest xxx n x xxxxxx xx compounding xxxxxxxx
xx xxxxxxxxxx 10%, xxxxxxxxx
Plug in xxxxx values
x $10000(1 +0.12)^10 x xxxxxx
=$31060
Answer: B
xxxxxxxx 3
FV = xx xx x xx ^n
xx = xxx
x x xxxx = 0.1346%
x xxxxxxxx = 5*52 x xxx
xx x 50(1 x 0.001346)^260
xx x xxxxxx
FV x $71 (Rounded the xxxxxxx whole dollar)
Answer: C
xxxxxxxx 4
Interest rate=9%
xxxxxxxx rate per xxxxxxxxxxxxxxxxx
FV=$142
xxxxx
xxxxxxxxxxxxxxxxxx
xxxxxx = xxxxxxxx
xxxxx x 1.0075^n
x = log xxxxxxxxxxxxxxx x 76.79326598
xx 77(rounded xx xxx nearest xxxxxxxx
n x xx months
xxxxxxx x
Question 5
FV x xx xxxxxxxx
xxxxx x PV xxxxxxxxxxxxxxxx
$1700 x PV (1+0.015) xxx
PV = $1700/ (1.015) xxx
xx x xxxxxxxxxxxx
PV x xxxxx xxxxxxxx to the xxxxxxx xxxxx dollar)
Answer: A
Question 6
xx = xxxxxxxxxx x
xxx $1,200, xxxx xxxxxxx xxxxx
1,200 x xxxxxxxxxxxxxxxxx
xx =1,200/ xxxxxxxxxxxxxxxx
xx = $877.3448828
xxx xxxx (Rounded xx the nearest $10)
Answer: x
xxxxxxxx 7
xxxxx xxx formula xx x PV*(1+r)^n x PV xx the xxxxxxx value
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