# 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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## 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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