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INVESTING EXAM PRACTICE PROBLEMS
Question 1
If you want to have $2.3 million dollars ($2,300,000) in your investment account in 30
years and you can earn an annual rate of return on your investments of 9.5%, how much
do you need to invest annually to have $2.3 million dollars in 30 years?
Question 2
Calculate the rate of return on a share of stock, if the stock rose from $120 per share to
$285 per share over 1 year, while paying $100 in dividends during the year.
Question 3
If you want to have $5.5 million dollars $5,500,000 in your investment account in 30
years and you can get an annual rate of return of 12%, how much do you need to invest
each year, beginning today, to have $5.5 million in your investment account in the
future?
Question 4
Calculate the annualized rate of return on a share of stock purchased for $52 and sold for $109
after 13 years. Dividends paid during each year were $3 per share.
Question 5
Calculate the rate of return on a share of stock purchased in 2004 for $25, and sold in 2006 for
$45. During the year the stock paid $40 in dividends.
Question 6
If you can invest $13,500 each in year an investment portfolio that generates an annual rate of
return of 10.7%, how much will you have in your account at the end of 25 years?
Question 7
Tyler and Jasmine are taking out life insurance on Jasmine. They have 1 small child. Jasmine
earns $85,000 per year. They believe they need this coverage for the next 18 years. How much
life insurance should they take out on Jasmine? Tyler believes he can get a rate of return of
8.75% on the life insurance settlement.
Question 8
If you continually invest $41,200 per year in a stock that generates an annual rate of
return of 14%, how much will your stock be worth in 15 years?
Question 9
Calculate the annualized rate of return on 100 shares of stock purchased for $93 per share
and sold at a loss at $44 per share 7 years later. During those 7 years the stock generated
dividends of $2 per share each year.
Question 10
If Sally wants to have 3 million dollars in her retirement account when she retires in 35
years, how much does she need to contribute to her retirement account each year
assuming her retirement account generates a 9% annual rate of return?