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Example
1
Quiz I
September 24, 2007
Finance 3341
Section 
Instructor:
Nataliya Polkovnichenko
Name: _________________________
Please do not open the examination until you are told to do so.
Instructions:
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The exam has 4 problems and 10 multiplechoice questions.
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Total number of points is 100.
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All books and notes MUST be closed. You may use your calculators.
9
The last page contains formulas that you may find helpful. You may detach the
page with formulas.
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For each of the multiplechoice questions, circle the best answer. You will not
receive any points if you circle more than one answer.
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Be neat and show ALL your work to receive full credit. Partial credit will be
given.
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You have 1 hour and 15 minutes to complete the exam.
Do not consult with anyone while you are working on the exam.
GOOD LUCK!!!
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Multiple Choice Questions
Circle the correct answer. Each of the correct answers is worth 4 points.
1.
What will be the approximate population of the United States, if its current
population of 280 million grows at a compound rate of 2% annually for 25 years?
A) 413 million
B) 430 million
C) 460 million
D) 488 million
2.
The salesperson offers, “Buy this new car for $25,000 cash or, with appropriate
down payment, pay $500 per month for 48 months at 8% interest.” Calculate the
“appropriate” down payment, assuming that the salesperson does not offer a free
lunch.
A) $1,000.00
B) $4,520.64
C) $5,127.24
D) $8,000.00
3.
How much more is perpetuity of $1,000 worth than an annuity of the same amount
for 20 years?
Assume a 10% interest rate and cash flows at end of period.
A) $297.29
B) $1,486.44
C) $1,635.08
D) $2,000.00
4.
Your car loan requires payments of $200 per month for the first year and payments
of $400 per month during the second year.
The annual interest rate is 12% and
payments begin in one month.
What is the present value of this twoyear loan?
A) $6,246.34
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 Fall '08
 Polkovnichenko
 Finance

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