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1) What is the future value of $1800 invested today at 18% interest in 30 years with interest compounded quarterly?

A. $300,154.84

B. $9.15

C. $354,182.71

D. $258,067.15

E. $394,832.66

2) What is the present value of $6700 received 14 years from now using on the 11% interest or discount read with interest compounded quarterly?

A. $1,554.37

B. $1,321.20

C. $30,609.58

D. $1,466.53

E. $1,438.69

3) What is the future value of $300 deposited at the beginning of each month for 18 years earning 4% interest?

A. $5,574.27

B. $91,193.59

C. $94,993.33

D. $46,293.61

E. $94,677.73

4) You are negotiating a professional sports contract pension payment. Upon your retirement you have been given two choices: $500,000 per year for 5 years (a total of $2,500,000) or $250,000 per year for 12 years (a total of $3 million). Which pension has the highest value? Assume payments occur at the end of each year, and use a 7% interest rate.

A. $500,000/5 year pension PV = $7,510,961.92 $250,000/12 year pension PV = $3,821,204.20

B. $500,000/5 year pension PV= $2,500,000 $250,000/12 year pension PV= $3,000,000

C. $500,000/5 year pension PV=$2,050,098.72 $250,000/12 year pension PV= $1,985,671.57

D. $500,000/5 year pension PV = $7,019,590.58 $250,000/12 year pension PV= 3,571,218.88

E. $500,000/5 year pension PV= $2,193,605.63 $250,000/12 year pension PV = $2,124,668.58

5) What is the monthly car payment on a 6 year $23,000 car loan at 5.5% annual interest?

A. $4,364.09

B. $4,604.12

C. $4,592.90

D. $375.77

E. $374.06

6) If you have $15,000 today and save $1,250 per month at the end of the month while earning an annual interest rate of 6.5% how many months would it take to accumulate $350,000?

A. 181

B. 13

C. 152

D. 14

E. 159

7) Assume the following information for car note: original loan amount = $27,500 annual interest rate = 7.8% term of the loan= 36 months. How much principal and interest was paid in the first year, and what is the principal balance on the loan after year one?

A. $7,733.19 of principal; $1,718.18 of interest; balance due $19,766.81

B. $8,463.98 of principal; $1,846.66 of interest; balance due $19,036.02

C. $7,670.13 of principal; $1,720.20 of interest; balance due $19,829.87

D. $8,586.89 of principal; $1,657.15 of interest; balance due $18,913.11

E. $8,518.93 of principal; $1,791.65 of interest; balance due $18,300.60

8) What is the net present value (NPV) and internal rate of return (IRR) of spending $275,000 today on medical school which will allow you to earn $50,000 more a year for the next 35 years assuming you could invest this money elsewhere and earn 16%?

A. NPV= $35,766.91 IRR= 18.1%

B. NPV=$310,766.91 IRR= 94%

C. NPV= ($310,766.91); IRR = (94%)

D. NPV= $1,116.153.09 IRR= 847%

E. NPV= ($35,766.91); IRR= (18.1%)

9) What is the effective interest rate assuming the following:

Annual rate= 13% pmt/yr = 52

A. 13.86%

B. 13.88%

C. 13.80%

D. 13.65%

10) Assume you're a professional athlete. You have been offered the following contract: bonus today= $5 million Annual salary (one payment at the end of the year) = $1 million for 5 years. What is the present value of the contract if you use a 10% discount rate?

A. $4,169,865

B. $3,790,787

C. $9,169,865

D. $8,678,431

E. $8,790,787

Financial Management, Finance

  • Category:- Financial Management
  • Reference No.:- M91261222

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