Finance Quiz 36 Question

Question 1

What is the future value of annual payments of $5,016 for 14 years at 4 percent?

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1 points  

Question 2

Kelly starting setting aside funds 8 years ago to buy some new equipment for her firm. She has saved $6,841 each quarter and earned an average rate of return of 7 percent. How much money does she currently have saved for this purpose?

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1 points  

Question 3

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

1 points  

Question 4

Assume interest rate of 10%. A company receives cash flows of $534 at the end of year 5, $213 at the end of year 7, and $912 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.

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1 points  

Question 5

What is the future value of $1,221 invested for 8 years at 14% 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.

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1 points  

Question 6

If you can double your money in 18 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.

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1 points  

Question 7

Assume interest rate of 9%. A company receives cash flows of $118,666 at the end of years 4, 5, 6, 7, and 8, and cash flows of $263,530 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.

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1 points  

Question 8

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.

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1 points  

Question 9

The ABC Company is considering a new project which will require an initial cash investment of $6,055. The project will produce no cash flows for the first 5 years. The projected cash flows for years 6 through 9 are $3,405, $2,850, $4,718, and $5,248, respectively. If the appropriate discount rate is 7%, compute the NPV of the project.

Enter your answer rounded off to two decimal points. Do not enter $ in the answer box.

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1 points  

Question 10

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.

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1 points  

Question 11

How much do you need to invest today in order to have $14,770 at the end of 16 years if you are sure to earn an interest at the rate of 9%? Note: Do not put $ sign in your answer. Simply write the number in the answer box.

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1 points  

Question 12

How many months it will take to grow your money from $4,712 to $7,580 if you can earn an interest of 16% compounded monthly? Note: Do not write "months" in your answer. Simply write the number in the answer box.

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1 points  

Question 13

Assume interest rate of 4%. Suppose that you receive $97,648 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.

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1 points  

Question 14

How many years it will take to grow your money from $4,133 to $9,600 if you can earn an interest of 12% compounded quarterly? Note: Do not write "years" in your answer. Simply write the number in the answer box.

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1 points  

Question 15

If the effective rate is 15%. 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.

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1 points  

Question 16

What is the future value of $959 invested for 9 years at 13% if interest is compounded quarterly? Note: Do not put $ sign in your answer. Simply write the number in the answer box.

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1 points  

Question 17

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.

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1 points  

Question 18

How much do you need to invest today in order to have $9,416 at the end of 19 years if you are sure to earn an interest at the rate of 14%, if interest is compounded quarterly? Note: Do not put $ sign in your answer. Simply write the number in the answer box.

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1 points  

Question 19

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..

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1 points  

Question 20

What is the future value of $12,727 for 5 years at 10 percent if interest is compounded semi-annually? Note: Do not enter "$" in your answer. Simply write down the number that you get as your answer.

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1 points  

Question 21

How many years it will take you to quadruple (means 4 times) your money if you can earn 4.59% each year? Note: Do not write "years" in your answer. Simply write the number in the answer box.

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1 points  

Question 22

Consider a 10-year loan with monthly payments at 10%. If the loan amount is $250,000, compute the Interest paid during the 6^th year.

Enter your answer rounded off to two decimal points. Do not enter $ in the answer box.

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1 points  

Question 23

The ABC Company is considering a new project which will require an initial cash investment of $13,248. The projected cash flows for years 1 through 4 are $9,734, $9,362, $8,528, and $5,772, respectively. If the appropriate discount rate is 11%, compute the NPV of the project.

Enter your answer rounded off to two decimal points. Do not enter $ in the answer box.

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1 points  

Question 24

Today, you are purchasing a $2,269 12-year car loan at 7 percent. You will pay annually at the end of each year. What is the amount of each payment?

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1 points  

Question 25

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.

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1 points  

Question 26

026:Say, you deposit $2,298 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 % for first 9 years and interest of 8 % for the remaining years? Note: Do not put $ sign in your answer. Simply write the number in the answer box.

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1 points  

Question 27

What is the future value of $4,143 invested for 25 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.

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1 points  

Question 28

What is the future value of quarterly payments of $810 for 8 years at 4 percent?

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1 points  

Question 29

How many years it will take you to double your money if you can earn 8% each year, given that compounding is quarterly? Note: Do not write "years" in your answer. Simply write the number in the answer box.

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1 points  

Question 30

How many years it will take to grow your money from $3,807 to $7,653 if you can earn an interest of 17% compounded monthly? Note: Do not write "years" in your answer. Simply write the number in the answer box.

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1 points  

Question 31

The Perpetual Life Insurance Co is trying to sell you an investment policy that will pay you and your heirs $11,707 per year forever. Suppose the Perpetual Life Insurance Co. told you the policy costs $198,190. 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.

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1 points  

Question 32

How much do you need to invest today in order to have $9,431 at the end of 23 years if you are sure to earn an interest at the rate of 11%, if interest is compounded monthly? Note: Do not put $ sign in your answer. Simply write the number in the answer box.

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1 points  

Question 33

If you receive $416 at the end of each year for the first three years and $710 at the end of each year for the next three years. What is the present value? Assume interest rate is 10%.

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.

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1 points  

Question 34

027:Say, you deposit $1,138 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 6 % compounded monthly for first 5 years and interest of 10 % compounded quarterly for the remaining years? Note: Do not put $ sign in your answer. Simply write the number in the answer box.

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1 points  

Question 35

023A:If you can double your money in 9 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.

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1 points  

Question 36

Barrett Pharmaceuticals is considering a drug project that costs $192,431 today and is expected to generate end-of-year annual cash flows of $13,021, 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.

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