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Unformatted text preview: FIN331 Business Finance Take-home quiz 3 Your Name: _____________________________ DUE ON: Wed Oct 28th Mon-Wed class Mon Oct 26 for Mon only class Future Value of a Lump Sum P3-1. You have $1,500 to invest today at 7 percent interest compounded annually. a. How much will you have accumulated in the account at the end of the following number of years? 1. Three years 2. Six years 3. Nine years b. Use your findings in part (a) to calculate the amount of interest earned in 1. the first three years (years 1 to 3) 2. the second three years (years 4 to 6) 3. the third three years (years 7 to 9) Present Value of a Lump Sum P3-2. An Indiana state savings bond can be converted to $100 at maturity six years from purchase. If the state bonds are to be competitive with U.S. savings bonds, which pay 8 percent annual interest (compounded annually), at what price must the state sell its bonds? Ignore taxes and assume no cash payments on savings bonds prior to redemption....
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- Spring '10