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# Quiz_1 - BB 366 Quiz#lA Fall ’09 Name \$94 “7 z a u 1(90...

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Unformatted text preview: BB 366 Quiz#lA Fall ’09 Name \$94 “7' z a u 1(90%) How many years will it take an investment to quadruple itself if the interest rate is 8% per year compounded annually? 4/ F = 4*? =1 /3(/+£) 2(10%) Suppose we have a 4 year car loan with monthly payments of \$350 per month where the nominal annual interest rate is 9% per year and we have monthly compounding. How much money did the borrower receive at the beginning of the loan? 59 :3 .09 =— (9, w¢r #4-=W3W 7': 4(P/ﬁ‘, ”mm”; My”) z @(o)( van/8+?) = ﬂ/% 095/75;— M:— W..- BB 366 Quiz#1B Fall ’09 Name Kat—coﬁad 1(90%) Ajax Systems, Inc has entered into an agreement that will yield \$400,000 immediately, \$250,000 per year for the ﬁrst 5 years (with the ﬁrst payment beginning at the 'end of year 1), and \$100,000 per year for the next 8 years (with the ﬁrst payment beginning at the end of year 6). ' What is the value of the above transaction at the time the agreement begins if we assume an interest rate of 10% per year? 50L {too I¢- I’M / 00“- W . «ms 34.1....9 I 2 3 9' \$— é \ Z. \ 7D 73: 900k; + grail; (p/4=2)‘0’)LC=0.IJAJ=‘§ 3 5.. 1L wok. (P/ﬂ=/aobjrl=eol/)d==3)( 7.4.7) (1 900A: ,e. legible-(3,7753) + mo/4—( 5, 33H)@.6L¢972 ) =7. 4/v0L + 92%, We + 37/. 2 We =-. / é 7—8 . 7 <5:— M / 2(10%) What are the monthly payments for a \$12,000 3 year car loan at a nominal annual interest rate of 9% per year if we have monthly compounding? o =— .3fi is. ”9&7!" 1’2 A/= 414/2 7—» M. r. r a, r ; % m giant”, 4/?) c vwwﬁ) ’0 3—6,) -_=..— /.&,M (_ agar/8); if sag/ac / - M ...
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Quiz_1 - BB 366 Quiz#lA Fall ’09 Name \$94 “7 z a u 1(90...

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