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Finance 313 Chapter 5 Practice Quiz

# Finance 313 Chapter 5 Practice Quiz - Chapter 5...

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Chapter 5 Introduction to Valuation: The Time Value of Money Chapter 05 Quiz ________ 1. Cornerstone Bank pays interest of 3.5 percent compounded annually. Uptown Bank pays 3.75 percent simple interest. Which one of the following statements is true if you invest \$1,000 in each bank for five years? a. Cornerstone Bank will pay you a total of \$176.59 in interest over the five years. b. Uptown Bank will pay you \$15.30 less interest over the five years than Cornerstone Bank will. c. Cornerstone Bank will pay you a total of \$175.00 in interest over the five years. d. Uptown Bank will pay you \$0.19 less interest than Cornerstone Bank over the five years. ________ 2. Rosa wants to have \$50,000 in her investment account fifteen years from now. How much does she have to deposit today to achieve her goal if she can earn 9.5 percent compounded annually?

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Finance 313 Chapter 5 Practice Quiz - Chapter 5...

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