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Mid1reviewsheet - Econ 103 Review Sheet I Chapter 4 1...

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Econ 103 - Review Sheet I Chapter 4: 1. Determine through calculation, which has a higher present value: An annual payment of \$100 received over 3 years or an annual payment of \$50 received 7 years. In both cases the discount rate is 7% (0.07). 2. To four decimal places what is the monthly interest rate if you are asked to convert a 12 percent annual rate to a monthly rate? 3.Convert each of the following basis points amounts to percents: a) 412.5 b) 10 c) 125.7 d) 1075 e) 1 4. Using the rule of 72, determine the approximate time it will take \$1000 to double given the following interest rates. a) 5.5% b) 10.0% c) 30.0% d) 2.0% e) 4.5% 5.What will be the amount owed at the end of one year if a borrower charges \$100 on her credit card and doesn't make any payments during the year if the interest rate is 1.5% per month? 6.Which investment plan will provide the highest future value: \$500 invested at 5 percent annually for four years and then that balance invested at 7 percent annually for an

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Mid1reviewsheet - Econ 103 Review Sheet I Chapter 4 1...

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