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Unformatted text preview: Name __________________________________ Webct User ID __________________________________ University of Houston C. T. Bauer College of Business Finance 3332 Principles of Financial Management Summer, 2007 Exam 2A To receive full credit, show all work—equations in variable form, equations with numbers plugged in—and clearly indicate your answer. Calculator financial functions may be used ONLY for finding annuity factors. Interest rates should be carried to a minimum of four decimal places. 1. What is the value of an investment which pays $80,000 per year for 20 years, with the first payment beginning in 12 years, if the opportunity cost is 8 percent? (10) 2. Lucia borrowed $35,000 at a nominal annual rate of 12 percent for 6 years. How much will be her monthly payments if payments are made at the beginning of each month? (9) 3. How much must I deposit today, if I want to have $675 in my account in 5 years, and the account earns an interest rate of 6 percent compounded continuously ? (7) 4. If I save $6,000 per year for 9 years, how much will I have saved if my account earns 6 percent per year? (8) 4. How much must my husband save each year to have $38,000 in 4 years if his account earns 3 percent per year? (8) 6. The dividends of Ross Corporation have grown from $2 per share to $4.40 per share over the past 6 years. What has 6....
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