Question 15 (Show all the working)

If you were to invest $150 for 3 years and earn 12% simple interest, what is the total amount of interest you would earn?

A. $27.00

B. $36.00

C. $40.50

D. $54.00

Question 16

Your parents set up a fund for you that you will not have access to until your 25th birthday, which is exactly six years from today. By prior arrangement, the fund will be worth exactly $200,000 on your 25th birthday. You need cash today and are willing to sell the fund today for a set amount. If the discount rate for such a cash flow is 12%, what is the maximum amount that you should expect from selling the fund today?

A. $72, 122.01

B. $98, 571.43

C. $101,327.38

D. $125 000.00

Question 17

In the equation below, what does 100 represent?

$75.13=$100 / (1+0.1)³

A. The present value a cash flow to be received at a later date

B. The future value a cash flow to be received at a later date

C. The discount rate for the future cash flow

D. The number of periods before the cash flow is to be received