Quiz1_A(Answers)

Quiz1_A(Answers) - BADM 115 – Section 11 Prof. Isabelle...

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Unformatted text preview: BADM 115 – Section 11 Prof. Isabelle Bajeux‐Besnainou Fall 2008 Form A QUIZ #1 1. List 3 advantages of a corporation Limited liability, indefinite life, ease of ownership transfer, and access to capital markets. 2. If you deposit money today in an account that pays 7 percent annual interest, how long will it take to double your money? I/YR 7.00% PV ‐1 FV 2 PV 0 Solve for the number of periods N 10.24 3. Find the future values of these ordinary annuities. Compounding occurs once a year. a. $500 per year for 12 years at 8 percent PMT ‐500 N 12 I/YR 8% Solve for future value FV $9,488.56 b. $250 per year for 6 years at 4 percent PMT ‐250 N 6 I/YR 4% Solve for future value FV $1,658.24 c. $500 per year for65 years at 0 percent PMT ‐500 N 6 I/YR 0% Solve for future value FV $3,000.00 A ‐ 1 d. Rework parts a, b, and c assuming that they are annuities due Repeat the procedures discussed in parts a, b, and c, but first switch the calculator to “BEG” mode a) PMT ‐500 N 12 I/YR 8% Solve for future value FV $10,247.65 b) PMT ‐250 N 6 I/YR 4% Solve for future value FV $1,724.57 c) PMT ‐500 N 6 I/YR 0% Solve for future value FV $3,000.00 A ‐ 2 ...
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This note was uploaded on 01/02/2010 for the course BADM 115 taught by Professor Bajeux during the Fall '08 term at GWU.

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