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b
1.
Your grandmother invested one lump sum 17 years ago at 4.25 percent interest.
Today, she gave you the proceeds of that investment which totaled $5,539.92. How
much did your grandmother originally invest?
a.
$2,700.00
b.
$2,730.30
c.
$2,750.00
d.
$2,768.40
e.
$2,774.90
d
2.
Forty years ago, your father invested $2,500. Today that investment is worth $107,921.
What is the average rate of return your father earned on his investment?
a.
8.50 percent
b.
9.33 percent
c.
9.50 percent
d.
9.87 percent
e.
9.99 percent
a
3.
An annuity stream of cash flow payments is a set of:
a.
level cash flows occurring each time period for a fixed length of time.
b.
level cash flows occurring each time period forever.
c.
increasing cash flows occurring each time period for a fixed length of time.
d.
increasing cash flows occurring each time period forever.
e.
arbitrary cash flows occurring each time period for no more than 10 years.
c
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 Spring '08
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