Question
1 Assume an interest rate of 8% per year. How much would you lose over 11 years if you had to give up interest on
1
Assume an interest rate of 8% per year. How much would you lose over 11 years if you had to give up interest on the interest-that is, if you received 88% instead of compounded interest? |
a) 27.1% b) 88% c) 53.4% d) 45.2%
2
What is the present value of receiving $1,950 a year for 30 years if you expect a rate of return of 6% a year? |
a)$26,841 b)$29,620 c)$10,681 d) $58,500
3.What is the present value of receiving $1,950 a year for 30 years if you expect a rate of return of 6% a year?
a)$340 b)$242 c) $124 d) $975
4
.Use the table below to answer the following questions: | |||||
Present Value of 1 Factor | Present Value of an Annuity of 1 Factor | ||||
Period | 1/2 Yr | Full-Yr | 1/2 Yr | Full-Yr | |
1 | 0.9578 | 0.9174 | 0.9578 | 0.9174 | |
2 | 0.9174 | 0.8417 | 1.8753 | 1.7591 | |
3 | 0.8787 | 0.7722 | 2.7540 | 2.5313 | |
4 | 0.8417 | 0.7084 | 3.5957 | 3.2397 | |
5 | 0.8062 | 0.6499 | 4.4019 | 3.8897 | |
6 | 0.7722 | 0.5963 | 5.1740 | 4.4859 | |
Assumption: Required annual effective rate (EPR) of return is 9%. |
If an investment pays you $54,000 every 6 months for 3 years, what is its present value? |
a) $273,380 b) $250,193 c) $279,396 d) $291,703
5
se the table below to answer the following questions: | |||||
Present Value of 1 Factor | Present Value of an Annuity of 1 Factor | ||||
Period | 1/2 Yr | Full-Yr | 1/2 Yr | Full-Yr | |
1 | 0.9578 | 0.9174 | 0.9578 | 0.9174 | |
2 | 0.9174 | 0.8417 | 1.8753 | 1.7591 | |
3 | 0.8787 | 0.7722 | 2.7540 | 2.5313 | |
4 | 0.8417 | 0.7084 | 3.5957 | 3.2397 | |
5 | 0.8062 | 0.6499 | 4.4019 | 3.8897 | |
6 | 0.7722 | 0.5963 | 5.1740 | 4.4859 | |
Assumption: Required annual effective rate (EPR) of return is 9%. |
If an investment pays you $54,000 every 6 months for 3 years, starting at the beginning of each 6 month period, what is its present value?
a) $250,193 b) $273,380 C) $279,396 d) $291,703
6.
Use the table below to answer the following questions: | |||||
Present Value of 1 Factor | Present Value of an Annuity of 1 Factor | ||||
Period | 1/2 Yr | Full-Yr | 1/2 Yr | Full-Yr | |
1 | 0.9578 | 0.9174 | 0.9578 | 0.9174 | |
2 | 0.9174 | 0.8417 | 1.8753 | 1.7591 | |
3 | 0.8787 | 0.7722 | 2.7540 | 2.5313 | |
4 | 0.8417 | 0.7084 | 3.5957 | 3.2397 | |
5 | 0.8062 | 0.6499 | 4.4019 | 3.8897 | |
6 | 0.7722 | 0.5963 | 5.1740 | 4.4859 | |
Assumption: Required annual effective rate (EPR) of return is 9%. |
If an investment pays you $324,000 at the end of 3 years, what is its present value?
a) $273,380 b) $250,193 c) $279,396 d) $291,703
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