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Quiz 1 Chapter 5

# Quiz 1 Chapter 5 - bought the stock for \$100 and she claims...

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Quiz #1 Name:____________________________________ HADM225 Formulas: t= r) ln(1 PV) / ln(FV + FV = PV(1 + r) t r = (FV / PV) 1/t – 1 Round all answers to four decimal places. SHOW ALL WORK. 1. (4 points) In 1979, Larry Bird of the Boston Celtics was the highest paid rookie in the NBA with a salary of \$650,000. In 2007, Greg Oden was the highest paid rookie at \$4.662 million in salary. By what percentage per year have top rookie salaries increased over the 28 year period from 1979 to 2007? 2. (4 points) Your grandmother gives you GE stock worth \$100,000. She initially
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Unformatted text preview: bought the stock for \$100 and she claims it has increased in value 13% each year on average. If this is true, then how long has she owned this GE stock? 3. (8 points) You have \$5000 to put in the bank for 3 years and you need to choose between two investment choices. Bank A will pay you 3% annually on your money over the next three years. Bank B promises you \$5500 at the end of three years if you invest your money with them. Which one do you choose?...
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