Reference no: EM131790190

QUESTION 1

How much do you need to invest today in order to have $320 at the end of 10 years if you are sure to earn an interest at the rate of 13%, if interest is compounded quarterly? Note: Do not put $ sign in your answer. Simply write the number in the answer box.

QUESTION 2

How many years it will take you to double your money if you can earn 11% each year, given that compounding is quarterly? Note: Do not write "years" in your answer. Simply write the number in the answer box.

QUESTION 3

Kelly starting setting aside funds 5 years ago to buy some new equipment for her firm. She has saved $827 each quarter and earned an average rate of return of 6 percent. How much money does she currently have saved for this purpose?

QUESTION 4

What is the future value of $747 invested for 14 years at 17% if interest is compounded quarterly? Note: Do not put $ sign in your answer. Simply write the number in the answer box.

QUESTION 5

How many years it will take you to quadruple (means 4 times) your money if you can earn 17.2% each year? Note: Do not write "years" in your answer. Simply write the number in the answer box.

QUESTION 6

If you can triple your money in 11 years, what is the implied rate of interest? Note: Do not put % sign in your answer. Simply write the number in percentages in the answer box.

QUESTION 7

If you put $700 in a savings account with a 10% nominal rate of interest compounded monthly, what will the investment be worth in 21 months (round to the nearest dollar)?
a.$1,176
b.$828
c.$770
d.$833
e.$827

QUESTION 8

Barrett Pharmaceuticals is considering a drug project that costs $189,136 today and is expected to generate end-of-year annual cash flows of $12,176, forever. At what discount 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 9

Assume interest rate of 6%. A company receives cash flows of $114,632 at the end of years 4, 5, 6, 7, and 8, and cash flows of $221,229 at the end of year 10. Compute the future value of this cash flow stream.

Do not enter the symbol $ in your answer. Simply enter the answer rounded off to two decimal points.

QUESTION 10

What is the future value of $3,464 invested for 26 years at 8% if interest is compounded semi-annually (twice a year)? Note: Do not put $ sign in your answer. Simply write the number in the answer box.

QUESTION 11

If the effective rate is 12%. What is the nominal rate if compounding is daily. Do not enter the symbol % in your answer. Simply enter the answer in percentages rounded off to two decimal points.

QUESTION 12

Assume interest rate of 3%. A company receives cash flows of $967 at the end of year 5, $316 at the end of year 7, and $624 at the end of year 10. Compute the future value of this cash flow stream.

Do not enter the symbol $ in your answer. Simply enter the answer rounded off to two decimal points.

QUESTION 13

If you can double your money in 23 years, what is the implied annual rate of interest, given that compounded in quarterly? Note: give your answer in percentages. Note: Do not put % sign in your answer. Simply write the number in percentages in the answer box.

QUESTION 14

How much do you need to invest today in order to have $12,538 at the end of 16 years if you are sure to earn an interest at the rate of 3%? Note: Do not put $ sign in your answer. Simply write the number in the answer box.

QUESTION 15

How many months it will take to grow your money from $4,221 to $6,855 if you can earn an interest of 6% compounded monthly? Note: Do not write "months" in your answer. Simply write the number in the answer box.

QUESTION 16

If you receive $299 at the end of each year for the first three years and $617 at the end of each year for the next three years. What is the present value? Assume interest rate is 8%.

Hint: This is an uneven cash flow problem. Use the CF function and solve for NPV to get the answer.

Just enter the number up to 2 decimal points. Do not enter $ in the answer box.

QUESTION 17

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 18

What should you be willing to pay in order to receive $899 annually forever, if you require 9% per year on the investment?

Just enter the number up to 2 decimal points. Do not enter $ in the answer box.

QUESTION 19

What is the future value of $2,658 invested for 22 years at 9% if interest is compounded semi-annually? Note: Do not put $ sign in your answer. Simply write the number in the answer box.

QUESTION 20

The ABC Company is considering a new project which will require an initial cash investment of $5,340. The project will produce no cash flows for the first 5 years. The projected cash flows for years 6 through 9 are $3,390, $3,016, $6,854, and $3,772, respectively. If the appropriate discount rate is 8%, compute the NPV of the project.
Enter your answer rounded off to two decimal points. Do not enter $ in the answer box.

QUESTION 21

Say, you deposit $2,633 in a bank for 18 years. What is the amount you will have in the bank at the end of 18 years if interest of 7 % compounded monthly for first 6 years and interest of 6 % compounded quarterly for the remaining years? Note: Do not put $ sign in your answer. Simply write the number in the answer box.

QUESTION 22

What is the future value of quarterly payments of $941 for 19 years at 5 percent?

QUESTION 23

What is the effective rate of 13% compounded monthly?
Do not enter the symbol % in your answer. Simply enter the answer in percentages rounded off to two decimal points.

QUESTION 24

How many years it will take to grow your money from $3,967 to $6,090 if you can earn an interest of 13% compounded monthly? Note: Do not write "years" in your answer. Simply write the number in the answer box.

QUESTION 25

Today, you are purchasing a $4,113 11-year car loan at 12 percent. You will pay annually at the end of each year. What is the amount of each payment?

QUESTION 26

What is the future value of annual payments of $7,466 for 14 years at 6 percent?

QUESTION 27

What is the future value of $2,623 for 6 years at 10 percent if interest is compounded semi-annually? Note: Do not enter "$; in your answer. Simply write down the number that you get as your answer.

QUESTION 28

The Perpetual Life Insurance Co is trying to sell you an investment policy that will pay you and your heirs $14,547 per year forever. Suppose the Perpetual Life Insurance Co. told you the policy costs $184,892. At what interest rate would this be a fair deal? Just enter the number in percentages up to 2 decimal points. Do not enter % in the answer box.

QUESTION 29

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 an APR 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 decimal points.

QUESTION 30

Say, you deposit $4,007 in a bank for 18 years. What is the amount you will have in the bank at the end of 18 years if interest of 4 % for first 9 years and interest of 10 % for the remaining years? Note: Do not put $ sign in your answer. Simply write the number in the answer box.

QUESTION 31

Assume interest rate of 4%. Suppose that you receive $112,716 at the end of each year for 4 years. Suppose that this cash flow starts at the end of the fourth year. Compute the present value.

Do not enter the symbol $ in your answer. Simply enter the answer rounded off to two decimal points.

QUESTION 32

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 enter the answer rounded off to two decimal points.

QUESTION 33

How much do you need to invest today in order to have $7,134 at the end of 27 years if you are sure to earn an interest at the rate of 13%, if interest is compounded monthly? Note: Do not put $ sign in your answer. Simply write the number in the answer box.

QUESTION 34

How many years it will take to grow your money from $4,324 to $8,358 if you can earn an interest of 7% compounded quarterly? Note: Do not write "years" in your answer. Simply write the number in the answer box.

QUESTION 35

If you can double your money in 7 years, what is the implied annual rate of interest, given that compounded semi-annually? Note: give your answer in percentages. Note: Do not put % sign in your answer. Simply write the number in percentages in the answer box.

QUESTION 36

The ABC Company is considering a new project which will require an initial cash investment of $19,997. The projected cash flows for years 1 through 4 are $9,303, $9,892, $9,867, and $4,199, respectively. If the appropriate discount rate is 13%, compute the NPV of the project.
Enter your answer rounded off to two decimal points. Do not enter $ in the answer box.