MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question. 1) You invest $8,000 in a savings account paying 5 percent interest a year, compounded annually. 1) At the end of four years, your account will contain approximately A) $10,880 B) $9,728 C) $10,208 D) $9,624 2) 2) National Automobile Parts had sales of $2 million this year. The marketing manager expects sales to grow at a 10 percent compound annual rate over the next 10 years. On this basis, sales in 10 years should be closest to A) $2,593,722 B) $5,081,309 C) $5,187,485 D) $4,622,885 3) ) 3) What approximate annual interest rate would you have to earn in order to double your money in six years? A) 12 percent B) 16 percent C) 7 percent D) 10 percent SHORT ANSWER. Write the word or phrase that best completes each statement or answers the question. 4) How much should you pay for a bond with $1,000 face value, a 14 percent coupon rate, and five years to maturity if your appropriate discount rate is 10 percent and interest is paid semiannually? MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question. 5) The present value of $5,000 received at the end of 5 years, discounted at 10 percent is closest to 5) A) $3,105 B) $620 C) $823 D) $3,403 6) You plan to deposit $400 at the end of each year for 16 years in an account that pays 9 percent compounded annually. The terminal value at the end of the 16 year period is closest to A) $13,201 B) $19,329 C) $17,667 D) $9,634 7) The present value of $100 per year received for 10 years discounted at 8 percent is closest to 7) A) $425 B) $671 C) $362 D) $177 6) ) 8) Find the future value of $400 in six years if the 8 percent annual interest is compounded monthly 8) A) $634.75 B) $599.47 C) $645.40 D) $612.38 9) How much should you pay for a bond with $1,000 face value, an 8 percent coupon rate, and seven years to maturity if your appropriate discount rate is 10 percent and interest is paid annually? Answers are rounded to the nearest dollar. A) $903 B) $560 C) $1,104 D) $1,000