Exam 1 Review

# Exam 1 Review - Fin 301 Exam 1 Multiple Choice Identify the...

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Fin 301 Exam 1 Multiple Choice Identify the choice that best completes the statement or answers the question. ____ 1. What would the future value of \$100 be after 5 years at 10% compound interest? a. \$161.05 b. \$134.54 c. \$127.84 d. \$151.29 e. \$143.65 ____ 2. Suppose a U.S. government bond will pay \$1,000 three years from now. If the going interest rate on 3-year government bonds is 4%, how much is the bond worth today? a. \$943.46 b. \$991.43 c. \$889.00 d. \$907.91 e. \$968.40 ____ 3. Uncle Junior has \$500,000 and wants to retire. He expects to live for another 20 years, and to be able to earn 8% on his invested funds. How much could he withdraw at the end of each of the next 20 years and end up with zero in the account? a. \$55,119.76 b. \$53,431.83 c. \$54,764.40 d. \$47,843.15 e. \$50,926.10 ____ 4. Credit card issuers must by law print their Annual Percentage Rate (APR) on their monthly statements (This is the nominal rate). If the APR is stated to be 15%, with interest paid monthly, what is the EFF% on the card? a. 15.59% b. 16.71% c. 17.10% d. 16.08% e. 12.91%

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