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exam1solution - 1 How long will it take for an investment...

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1. How long will it take for an investment to triple at 10 % per year (a) simple interest (5 pt) and (b) compound interest? (5 pt)
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2. A northern California consulDng firm wants to start saving money for replacement of network servers. If the company starts to invest $3000 at the end of year 2, increases the amount invested by 5% each year and earns interest at a rate of 10% per year, (a) draw a cash flow diagram (5 pt) and (b) calculate how much will be in the account 5 years from now. (15pt)
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3. BKM Systems sales revenues are shown below. (a) Draw a cash flow diagram (5 pt) and (b) calculate the equivalent annual worth (years 1 through 7), using an interest rate of 10% per year. (15 pt)
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4. You love a red mustang, of which MSRP is $22,000 (You are buying at MSRP). In September, Ford offers 0% interest rate for 60 months. However, your dealer offers $8,000 instant rebate if you do not
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