Based on this cash flow diagram, what is a correct specification?

a$.$

X $=20($P$/$A$,4\%,6)+20($P$/$G$,4\%,4)$

b$.$

X $=20($P$/$A$,6\%,4)($P$/$F$,6\%,4)+20($P$/$G$,5\%,4)$

c$.$

X $=20($P$/$G$,6\%,4)$

d$.$

X $=20($P$/$A$,6\%,4)+20($P$/$G$,6\%,4)$

QUESTION $2$

You plan to spend $$300$ for gasoline in February, $$350$ in March, and $$400$ in April.

a$.$

G $=50$

b$.$

G $=300$

c$.$

G $=400$

d$.$

G $=1050$

QUESTION $3$

You borrow $$8000$ at an nominal interest rate of $6\%.$ If you repay this loan quarterly, making $4$ payments per year, the effective annual rate $=$

a$.$

$1\mathrm{.}5\%$

b$.$

$6\mathrm{.}0\%$

c$.$

$6\mathrm{.}14\%$

d$.$

$6\mathrm{.}86\%$

QUESTION $4$

Your credit card charges a $21\%$ nominal annual interest rate on unpaid balances. If interest is compounded continuously, the effective annual interest rate $=$

a$.$

$1\mathrm{.}75\%$

b$.$

$21\mathrm{.}0\%$

c$.$

$23\mathrm{.}1\%$

d$.$

$23\mathrm{.}4\%$

QUESTION $5$

You save $$3000$ in Year $1,$ $$2500$ in Year $2,$ and $$2000$ in Year $3.$ If i $=10\%,$ which specification is NOT correct for calculating the future worth of this saving at the end of Year $3?$

a$.$

F $=3000($F$/$A$,10\%,3)–500($P$/$G$,10\%,3)($F$/$P$,10\%,3)$

b$.$

F $=3000($F$/$A$,10\%,3)–500($P$/$G$,10\%,3)$

c$.$

F $=3000($F$/$A$,10\%,3)–500($A$/$G$,10\%,3)($F$/$A$,10\%,3)$

d$.$

F $=3000($F$/$P$,10\%,2)+2500($F$/$P$,10\%,1)+2000$

QUESTION $6$

You plan to spend $$300$ for gasoline in February, $$350$ in March, and $$400$ in April. If this is January and monthly interest is $1/2\%,$ the present worth of your planned gasoline purchases $=$

a$.$

$$742$

b$.$

$$758$

c$.$

$$1039$

d$.$

$$1050$

QUESTION $7$

Your credit card charges a $21\%$ nominal annual interest rate on unpaid balances. If interest is compounded monthly, the effective annual interest rate $=$

a$.$

$1\mathrm{.}75\%$

b$.$

$21\mathrm{.}0\%$

c$.$

$23\mathrm{.}1\%$

d$.$

$23\mathrm{.}4\%$

QUESTION $8$

You expect to save $$3000$ in Year $1,$ $$2500$ in Year $2,$ and $$2000$ in Year $3.$ If i $=10\%,$ the future worth of your savings at the end of Year $3=$

a$.$

$$7500$

b$.$

$$7940$

c$.$

$$8084$

d$.$

$$8380$

QUESTION $9$

Your credit card charges a $21\%$ nominal annual interest rate on unpaid balances. If interest is compounded daily, the effective annual interest rate $=$

a$.$

$1\mathrm{.}75\%$

b$.$

$21\mathrm{.}0\%$

c$.$

$23\mathrm{.}1\%$

d$.$

$23\mathrm{.}4\%$

QUESTION $10$

You plan to spend $$300$ for gasoline in February, $$350$ in March, and $$400$ in April. If this is January, the present worth of your planned gasoline purchases can be found by which formula if the interest rate $=(1)/(2)\%$ per month?

a$.$

P $=300($P$/$G$,(1)/(2)\%,3)(50($A$/$G$,(1)/(2)\%,3)$

b$.$

P $=300($P$/$A$,(1)/(2)\%,3)+50($P$/$G$,(1)/(2)\%,3)$

c$.$

P $=300($P$/$G$,(1)/(2)\%,3)$

d$.$

P $=50($P$/$G$,(1)/(2)\%,3)$

QUESTION $11$

Which of the following is correct?

a$.$

Geometric gradients are the inverse of arithmetic gradients

b$.$

Geometric gradients change by a factor of $($i$-$g$)$ over time

c$.$

Geometric gradients change by a constant amount over time

d$.$

Geometric gradients change by a constant percentage over time

QUESTION $12$

You plan to spend $$300$ for gasoline in February, $$350$ in March, and $$400$ in April. If this is January, the present worth of your planned gasoline purchases can also be found by which formula if the interest rate $=(1)/(2)\%$ per month?

a$.$

P $=1050(1\mathrm{.}005)3$

b$.$

P $=300+350(1\mathrm{.}005)+400(1\mathrm{.}005)2$

c$.$

P $=300(1\mathrm{.}005)+350(1\mathrm{.}005)2+400(1\mathrm{.}005)3$

d$.$

P $=300(1\mathrm{.}005)-1+350(1\mathrm{.}005)-2+400(1\mathrm{.}005)-3$