Finance Multiple Problems

Question 1
1.

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)?
Answer
a. $827
b $770
.
c. $1,176
d $833
.
e. $828
1 points

Question 2
1.
The ABC Company is considering a new project which will require an initial cash investment of $13,201. The
projected cash flows for years 1 through 4 are $6,710, $9,146, $8,952, and $4,886, respectively. If the appropriate
discount rate is 3%, compute the NPV of the project.
Enter your answer rounded off to two decimal points. Do not enter $ in the answer box.
Answer
1 points

Question 3
1.
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.
Answer
1 points

Question 4
1.

Today, you are purchasing a $2,507 7-year car loan at 5 percent. You will pay annually at the end
of each year. What is the amount of each payment?
Answer
1 points

Question 5
1.

027:Say, you deposit $2,338 in a bank for 17 years. What is the amount you will have in the bank
at the end of 17 years if interest of 7 % compounded monthly for first 7 years and interest of 7 %
compounded quarterly for the remaining years? Note: Do not put $ sign in your answer. Simply
write the number in the answer box.
Answer
1 points

Question 6
1.

How many years it will take to grow your money from $4,569 to $6,111 if you can earn an
interest of 8% compounded monthly? Note: Do not write "years" in your answer. Simply write
the number in the answer box.
Answer
1 points

Question 7
1.

023A:If you can double your money in 17 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.
Answer
1 points

Question 8
1.
If you receive $284 at the end of each year for the first three years and $584 at the end of each year for
the next three years. What is the present value? Assume interest rate is 7%.
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.
Answer
1 points

Question 9
1.

If the effective rate is 11%. 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.
Answer
1 points

Question 10
1.
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.
Answer
1 points

Question 11
1.

How many years it will take you to quadruple (means 4 times) your money if you can earn
10.55% each year? Note: Do not write "years" in your answer. Simply write the number in the
answer box.
Answer
1 points

Question 12
1.

How much do you need to invest today in order to have $1,439 at the end of 16 years if you are
sure to earn an interest at the rate of 12%, if interest is compounded monthly? Note: Do not put $
sign in your answer. Simply write the number in the answer box.
Answer
1 points

Question 13
1.
Barrett Pharmaceuticals is considering a drug project that costs $199,308 today and is expected to generate end-ofyear annual cash flows of $14,964, 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.
Answer
1 points

Question 14
1.

How many years it will take to grow your money from $4,510 to $9,085 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.
Answer
1 points

Question 15
1.
Assume interest rate of 4%. Suppose that you receive $115,214 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.
Answer
1 points

Question 16
1.
The ABC Company is considering a new project which will require an initial cash investment of $5,723. The project
will produce no cash flows for the first 5 years. The projected cash flows for years 6 through 9 are $2,456, $4,090,
$6,718, and $3,663, respectively. If the appropriate discount rate is 3%, compute the NPV of the project.
Enter your answer rounded off to two decimal points. Do not enter $ in the answer box.
Answer
1 points

Question 17
1.
The Perpetual Life Insurance Co is trying to sell you an investment policy that will pay you and your heirs $13,124
per year forever. Suppose the Perpetual Life Insurance Co. told you the policy costs $192,923. 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.
Answer
1 points

Question 18
1.

How many months it will take to grow your money from $4,074 to $6,702 if you can earn an
interest of 8% compounded monthly? Note: Do not write "months" in your answer. Simply write
the number in the answer box.
Answer
1 points

Question 19
1.

If you can triple your money in 23 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..
Answer
1 points

Question 20
1.

What is the future value of quarterly payments of $674 for 18 years at 7 percent?
Answer
1 points

Question 21
1.

Kelly starting setting aside funds 10 years ago to buy some new equipment for her firm. She has
saved $4,143 each quarter and earned an average rate of return of 7 percent. How much money
does she currently have saved for this purpose?
Answer
1 points

Question 22
1.

How much do you need to invest today in order to have $14,116 at the end of 20 years if you are
sure to earn an interest at the rate of 14%? Note: Do not put $ sign in your answer. Simply write
the number in the answer box.
Answer
1 points

Question 23
1.

Assume interest rate of 8%. A company receives cash flows of $854 at the end of year
5, $273 at the end of year 7, and $503 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.
Answer
1 points

Question 24
1.

What is the future value of $149 invested for 8 years at 10% if interest is compounded quarterly?
Note: Do not put $ sign in your answer. Simply write the number in the answer box.
Answer
1 points

Question 25
1.

If you can double your money in 29 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.
Answer
1 points

Question 26
1.

What is the future value of $13,948 for 13 years at 5 percent if interest is compounded semiannually? Note: Do not enter "$" in your answer. Simply write down the number that you get as
your answer.
Answer
1 points

Question 27
1.

How many years it will take you to double your money if you can earn 14% each year, given that
compounding is quarterly? Note: Do not write "years" in your answer. Simply write the number
in the answer box.
Answer
1 points

Question 28
1.
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.
Answer
1 points

Question 29
1.

What is the effective rate of 19% compounded monthly?
Do not enter the symbol % in your answer. Simply enter the answer in percentages rounded off to two
decimal points.
Answer
1 points

Question 30
1.

What is the future value of annual payments of $1,775 for 13 years at 5 percent?
Answer
1 points

Question 31
1.

What is the future value of $2,029 invested for 6 years at 12% if interest is compounded semiannually (twice a year)? Note: Do not put $ sign in your answer. Simply write the number in the
answer box.
Answer
1 points

Question 32
1.

What is the future value of $2,414 invested for 10 years at 17% if interest is compounded semiannually? Note: Do not put $ sign in your answer. Simply write the number in the answer box.
Answer
1 points

Question 33
1.

What should you be willing to pay in order to receive $975 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.
Answer
1 points

Question 34
1.

How much do you need to invest today in order to have $683 at the end of 23 years if you 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.

Answer
1 points

Question 35
1.
Assume interest rate of 9%. A company receives cash flows of $97,052 at the end of years 4, 5, 6, 7, and 8, and cash
flows of $229,073 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.
Answer
1 points

Question 36
1.

026:Say, you deposit $3,302 in a bank for 17 years. What is the amount you will have in the bank
at the end of 17 years if interest of 5 % for first 7 years and interest of 7 % for the remaining
years? Note: Do not put $ sign in your answer. Simply write the number in the answer box.
Answer