EME 460 Quiz Exam Questions

1.For the year series of values shown on the following time diagram and a 12% annual interest rate, please find:

Present value at year 0

A) 5,178

B) 4,869

C) 4,582

D) 4,314

2.For the year series of values shown on the following time diagram and a 11% annual interest rate, please find:

Future value at year 10

A) 12,672

B) 13,046

C) 13,431

D) 13,825

3.For the year series of values shown on the following time diagram and a 10% annual interest rate, please find:

Annual equivalent value for the 10 years

A) 874.7

B) 858.7

C) 842.7

D) 826.8

4.In the year timeline series shown below, using a 9% annual interest rate, please find:

Present value at year 0

A) 8,305

B) 7,910

C) 7,543

D) 7,200

5.In the year timeline series shown below, using a 12% annual interest rate, please find:

Future value at year 10

A) 19,661

B) 20,517

C) 21,417

D) 22,362

6.In the year timeline series shown below, using a 10% annual interest rate, please find:

Annual equivalent value for the 10 years

A) 1,287

B) 1,281

C) 1,274

D) 1,268

7.An annual nominal interest rate of 10% is compounded quarterly. What is the interest rate per quarter?

A) 10%

B) 2.5%

C) 5%

D) 10.38%

8.An annual nominal interest rate of 8% is compounded quarterly. What is the effective interest per year?

A) 7.86%

B) 8%

C) 8.24%

D) 8.42%

9.If you borrow $60,000 at an annual interest rate of 10% compounded monthly, calculate the equal monthly payments that will pay off this loan over five years

A) 1334.7

B) 1304.5

C) 1274.8

D) 1245.5

10.If you borrow $60,000 at an annual interest rate of 12% compounded monthly, calculate the equal yearly payments that will pay off this loan over five years

A) 16,926.9

B) 17,394.4

C) 17,871.1

D) 18,356.8

11.What future amount of money will be accumulated 15 years from now by investing $5,000 now plus $2,000 in year five at 10% interest compounded quarterly?

A) 31,381.0

B) 27,369.1

C) 23,871.1

D) 20,821.2

12.What are the monthly payments that will pay off a $1,000,000 oil rig loan with 24 equal end-of-payments? If 10% annual nominal interest rate is compounded monthly.

A) 47,073.5

B) 46,607.8

C) 46,144.9

D) 45,684.7

13.A $2,000 bond matures in 20 years and pays semi-annually interest of $85. What Nominal rate of return (or annual bond ROR) compounded semi-annually does the bond yield if you pay $1,800 for it and hold it until maturity? Assume that the analysis is made on the first day of a new semi-annual period.

A) 5.5%

B) 5.25%

C) 5%

D) 4.85%

14.A gold mining project has an initial cost of $130,000 and an estimated salvage value after 15 years of $80,000. Estimated average annual revenues are $25,000. Estimated average annual costs are $15,000. Assuming that annual revenue and cost are uniform, what is the prospective rate of return?

A) 8.21%

B) 7.56%

C) 6.88%

D) 6.05%

15.A new project requires development costs of $60 million at the time zero and $100 million at the end of year 2 with incomes of $40 million per year at the end of years 1, 2 and 3 and incomes of $85 million per year at the end of years through years 4 through 10 with zero salvage value predicted at the end of year 10. What is the rate of return for this project?

A) 48.05%

B) 49.6%

C) 51.1%

D) 53.8%

16.Calculate the present worth cost of service for the following cash flows. Use annual compounding periods and the appropriate effective annual interest rate that is equivalent to 10% compounded monthly.

14,246.3
14,123.0
14,002.6
13,884.9

12 years ago

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