MATH 320 Practice Test 5 - II-19 PRACTICE MULTIPLE CHOICE...

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II-19 PRACTICE MULTIPLE CHOICE TEST 5 1. You are given 8t = t ~ 1 for 2:::; t ~ 10. For anyone year interval between nand n + 1, with 2 :::; n :::; 9, calculate the equivalent d(2). The accumulated value of 1 at time t, for 0:::; t :::; 1, is given by a second degree polynomial in t. You are given (i) the nominal rate of interest convertible semiannually for the first half of the year is 5% per year, and (ii) the effective rate of interest for the year is 4% per year. Find the value of 8.75, Two funds, A and B, start with the same amount. Fund A grows at an annual interest rate of i > 0 for n years, and at an annual interest rate of j > 0 for the next n years. Fund B grows at an annual interest rate of k > 0 for 2n years. Fund A equals 1.5 times Fund B after n years. The amounts in the two funds are equal after~71:years. Which of the following are true? 2. ,,' (A) .021 (B) l n (B) .023 I.j<k<i (C) n - 1 n (C) .025 II. k < :i (i + j) (D) _n_ n-1 (D) .027 (E) .029 (A) 1& II (B) I & ID (C) II & ID (D) All (E) None of A, B, C, D I; ~ ' ~. You are given the following data on three series of payments. ~ Payment at end of year Accumulated value 11 18 at end of year 18 240 200 300 X 0 360 700 X + 100 Y 600 0 X Y. (A) 93 (B) 99 (C) 102 (D) 107 (E) 111 The force of interest at time t is 1~O. Calculate a -I (3). (A) .76 (B) .78 .80 .82 .84
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~ •• •• •• •• •• •• .- •• •• •• •• ••• ••• ••• ~ (E) 704 (E) vl.5 (E) 1944 (E) 25,811 (D) 694 (D) 1866 " r/16,955 (C) 684 (C) 1753 (C) 16,787 (B) 674 (B) 13,357 (B) 1614 A corporation borrows 10,000 for 25 years, at an effective annual interest rate of 5%. A sinking fund is used to accumulate the principal by means of 25 annual deposits earning an effective annual interest rate of 4%. Calculate the sum of the net amount of interest paid in the 13th installment and the increment in the sinking fund for the ninth year. (A) 664 The force of interest at time t is kt3. R is the present value of a four-year continuously increasing annuity which has a rate of payment at time t of mt3. Calculate R. (A) 13,225 CA) 1423 / / IT-20 6. 7. (A) k - Te-4k (B) k - ke-64k (C) ge-4k (E) m( I lee -64k) Given that i(4) = .04, calculate (Da)68/' (A) 1100 (B) 1109 (C) 1118 (D) 1127 (E) 1136 9. On a loan, payments of 1 are made at the end of each one-half of an interest conversion period for a total of five interest conversion periods. What is the amount of principal included in the eighth payment? 10. An annuity provides for 30 annual payments. The first payment of 100 is made immediately and the remaining payments increase by 8% per year. Interest is calculated at 13.4% per year. Calculate the present value of the annuity. 11. John took out a 2,000,000 construction loan, disbursed to him in three installments. The first installment of 1,000,000 is disbursed immediately, and this is followed by two 500,000 installments at six month intervals. The interest on the loan is calculated at a rate of 15% convertible semiannually and accumulated to the end of the second year. At that time the loan and accumulated interest will be replaced
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