Question 1

Your family owns a velociraptor skeleton that is currently valued at $83.5 thousand. Your grandfather, being an avid fossil collector, bought it 50 years ago for $17.3 thousand. If the skeleton keeps appreciating at the same average annual rate, what would be its value 25 years from now?

Question 2

You would like to establish a trust fund that would pay annual payments to your heirs of $104 thousand a year forever. You expect the trust fund to earn an average return of 7.57 percent. How much do you need to deposit into this trust fund today to achieve your goal?

Question 3

You are thinking of investing in a project that will pay you $100,000 6 years from now, and another $100,000 12 years from now. You think the right discount rate for the project is 8%. What is the maximum you should be willing to pay for this investment?

Question 5

A firm recently purchased a new facility costing $984 thousand. The firm financed this purchase with an amortized loan at an interest rate of 8.8 percent APR, with monthly payments of $23.9 thousand. How long will it take to pay off this loan? (Enter answer in months, accurate to two decimal places.)

Question 6

An investment is expected to produce $1,025 at the end of each year for the next 11 years. Other investments of similar riskiness available to you are yielding 11.2 percent return. What is the maximum you should be willing to pay for this investment?

Question 7

You are not thrilled about spending your entire life working. So, you have decided that you will save $8 thousand a year, starting at the end of this year, and retire as soon as you can accumulate $1 million. If you can earn an average of 7.89 percent on your savings, how many years will pass before you get to retire?

Enter answer in years, accurate to two decimal places.

Question 8

How much money must you invest today, at 8.6 percent fixed annual interest rate, in order to have 10 thousand in 11 years?

Question 9

You have $1,003 today, and want to double your money in 6 years. What interest rate must you earn to achieve your goal?

Enter rate in percents, accurate to two decimal places.

Question 10

The house you want to buy costs $277 thousand. You plan to make a cash down payment of 10 percent, and borrow the rest in a 30 year mortgage at 3.49 percent APR. What will be the amount of your monthly mortgage payment?

Question 11

You estimate that you will need $691 thousand in 30 years to buy some cybernetic body enhancements, including infrared vision, retractable claws, and expanded brain storage capacity. To achieve your financial goal, you want to make three equal-sized deposits into an account paying a fixed annual rate of 8.93%. The first deposit will be made right now, the second 10 years from now, and the third 20 years from now. What is the size of each deposit you need to make in order to partake of future cybernetic goodness? (Hint: draw this out on a timeline.)

Question 12

Your mortgage statement says that your loan is at 6.82 percent APR, with monthly payments. What is the effective annual rate on your mortgage (i.e., taking into account the monthly compounding)? Enter answer in percents, accurate to two decimal places.

Question 13

You are being offered an investment that will pay you (and your heirs) $10,868 per year forever, starting 15 years from now. If your discount rate on this investment is 6.5 percent, how much would you be willing to pay for it today?

Question 14

Today you deposit $8 thousand into an account paying 5% APR compounded daily. How much money will you have in the account 19 years from now?

Question 15

8 years ago you started making annual deposits of $483 into an account paying 6% annual return. You continue to make these deposits every year without fail. If you keep doing this every year for the next 9 years, how much money will you have in 9 years?

Question 16

You will receive $1,415 at the end each year in years 1 through 10, $2,477 in years 11 through 20, and $3,344 in years 21 through 30. How much is all this worth today, if the required rate of return is 6%?

Question 17

Your friend just bought a new car for $30,298. You expect that the value of the car will decline by 6 percent every year. What will be the value of the car in 8 years?

Question 18

Starting at the end of year 2, and every even-numbered year thereafter (i.e., year 4, 6, 8, ... etc.), you expect to receive $656. You will receive a total of 16 payments. What is the fair value of these cash flows today, if the going rate is 6 percent per year?

Question 19

Your neighbor has gotten into some serious credit card debt, and currently owes $19,657 with an interest rate of 16% APR. Making the minimum payment of $403 per month, how long will it take to pay off this loan?

Enter answer in months, to two decimal places.