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? a. $10,218.47 b. $12,524.76 c. $12,816.17 d. $13,726.90 ________ 3. Carlos has $2,413 saved today. He wants to buy a different vehicle as soon as he has $2,700 saved. How long does he have to wait to get his vehicle if he earns 4.5 percent compounded annually? a. 2.55 years
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This note was uploaded on 03/20/2011 for the course FIN 313 taught by Professor Richey,gregm during the Spring '11 term at CSU San Bernardino.

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

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