This preview shows pages 1–3. Sign up to view the full content.
Question 1
(1 point) Your friend just won the Florida lottery. She
has the choice of
$15,000,000 today or a 20year annuity of $1,050,000, with the first
payment coming one year from today. What rate of return is built into the
annuity?
Student response:
Student
Response
Answer Choices
a.
2.79%
b.
3.10%
c.
3.44%
d.
3.79%
e.
4.17%
Score:0 / 1
Question 2
(1 point) What's the future value of $1,500 after 5 years if the appropriate
interest rate is 6%, compounded semiannually?
Student response:
Student
Response
Answer Choices
a.
$1,819.33
b.
$1,915.08
c.
$2,015.87
d.
$2,116.67
e.
$2,222.50
Score:1 / 1
Question 3
(1 point) Pace Co. borrowed $25,000 at a rate of 7.25%, simple interest, with
interest paid at the end of each month. The bank uses a 360day year.
How much interest would Pace have to pay in a 30day month?
Student response:
Student
Answer Choices
This preview has intentionally blurred sections. Sign up to view the full version.
View Full Document Response
a.
$136.32
b.
$143.49
c.
$151.04
d.
$158.59
e.
$166.52
Score:1 / 1
Question 4
(1 point) You own an oil well that will pay you $30,000 per year for 10 years,
This is the end of the preview. Sign up
to
access the rest of the document.
This document was uploaded on 04/29/2010.
 Spring '09
 Finance, Annuity

Click to edit the document details