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exam1A.ch1ch2ch2Ach5partial

exam1A.ch1ch2ch2Ach5partial - Name Peoplesoft Number...

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Name __________________________________ Peoplesoft Number __________________________________ University of Houston C. T. Bauer College of Business Finance 3332 Fall, 2010 Exam 1A To receive full credit: Show all work—equations in variable form & equations with numbers plugged in Clearly indicate your answer Financial functions may be used only for finding annuity factors All inputs to find annuity factor must be shown Carry all decimals, rounding only final answer Decimal places should be rounded to four places (two in percent form) Currency answers rounded to the nearest cent, where applicable Include applicable units ($, %, etc.) on answers 1. How much would one pay for a retirement annuity which pays $200,000 per year for 40 years, with the first payment  beginning in 30 years, if the opportunity cost is 6 percent? (10) 2. If Austin invests $16,000 per year for 14 years, how much will he have if his investments earn 12 percent per year? (8) 3. Hannah’s mom is planning for her college education and wants to have $30,000 available in 8 years. How much must  she deposit each year if her account earns an annual rate of 8 percent? (6) 4. a) Raylene borrowed $40,000 at an annual rate of 4 percent to be repaid with annual payments over the next 10 years.  How much will be her annual payments? (6)     b) If Raylene makes her payments at the beginning of each year, how much will be her annual payments? (4)
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