Test108 - MATH/STAT 170 Test 1, October 23, 2008 To get...

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MATH/STAT 170 Test 1, October 23, 2008 To get full credit for a problem you must both check the value that is closest to the correct answer and show work , which means writing down the formulas being used. Correct formula/formulas with an incorrect answer are worth 4 points. A correct answer with incorrect or missing formulas is worth nothing. Each problem is worth 13.5 pts. 1) You receive an award that pays $1,000 at the beginning of year 0, $2,000 at the beginning of year 1, and $3,000 at the beginning of year 2. What is the present value of this award at 5% interest per year? a) 5600 b) 5700 c) 5800 d) 5900 e) 6000 2) Huntington Bank offers an account that pays 3%, compounded daily. Lafayette Bank offers an account with the same annual effective rate, but compounded twice a year. Lafayette Bank’s nominal interest rate is i% per year, compounded twice a year. Find i. a) 0.015112479 b) 0.030224958 c) 0.030225000 d) 0.030452231 e) 0.030453346
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3) Bob Roarman will sell you a slightly used car for $5,000 cash or you can buy the same car for
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This note was uploaded on 10/28/2010 for the course MA 170 taught by Professor Staff during the Fall '08 term at Purdue University-West Lafayette.

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Test108 - MATH/STAT 170 Test 1, October 23, 2008 To get...

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