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Unformatted text preview: FNAN 301, fall 2009, quiz 1, solutions Quantitative: simple and compound interest 1. Marat just deposited $3,500 in an account that will earn 6.2 percent per year in compound interest for 8 years. If Jelena deposits $4,000 in an account in 2 years that earns simple interest, then how much simple interest per year must Jelena earn to have the same amount of money in 8 years from today as Marat will have in 8 years from today? 1. Evgeny just deposited $3,700 in an account that will earn 6.1 percent per year in compound interest for 9 years. If Svetlana deposits $4,000 in an account in 2 years that earns simple interest, then how much simple interest per year must Svetlana earn to have the same amount of money in 9 years from today as Evgeny will have in 9 years from today? 1. Marat just deposited $3,500 in an account that will earn 7.2 percent per year in compound interest for 8 years. If Jelena deposits $4,000 in an account in 3 years that earns simple interest, then how much simple interest per year must Jelena earn to have the same amount of money in 8 years from today as Marat will have in 8 years from today? 1. Evgeny just deposited $3,700 in an account that will earn 7.1 percent per year in compound interest for 9 years. If Svetlana deposits $4,000 in an account in 3 years that earns simple interest, then how much simple interest per year must Svetlana earn to have the same amount of money in 9 years from today as Evgeny will have in 9 years from today? Quantitative: amount needed to invest to have same future value 2. Four years ago, Monica invested $17,300 in a security that earns 4.7 percent per year and pays investors in 14 years from today. Today, Brittany plans to invest in a security that earns 4.2 percent per year and would pay investors in 14 years. How much money does Brittany need to invest today to have just as much as Monica will have in 14 years? 2. Four years ago, Monica invested $17,300 in a security that earns 4.2 percent per year and pays investors in 14 years from today. Today, Brittany plans to invest in a security that earns 4.7 percent per year and would pay investors in 14 years. How much money does Brittany need to invest today to have just as much as Monica will have in 14 years? 2. Three years ago, Phoebe invested $17,300 in a security that earns 3.2 percent per year and pays investors in 13 years from today. Today, Victoria plans to invest in a security that earns 3.7 percent per year and would pay investors in 13 years. How much money does Victoria need to invest today to have just as much as Phoebe will have in 13 years? 2. Three years ago, Phoebe invested $17,300 in a security that earns 3.7 percent per year and pays investors in 13 years from today. Today, Victoria plans to invest in a security that earns 3.2 percent per year and would pay investors in 13 years. How much money does Victoria need to invest today to have just as much as Phoebe will have in 13 years?...
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This note was uploaded on 02/03/2011 for the course FINANCE 301 taught by Professor Murray during the Spring '09 term at George Mason.
 Spring '09
 MURRAY
 Interest

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