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QUIZ_1_-_Section_2_-_Financial_Mathematics_-_Solution_Manual_Spring_2011

# QUIZ_1_-_Section_2_-_Financial_Mathematics_-_Solution_Manual_Spring_2011

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UNIBE-FIU BUSINESS ADMINISTRATION International Business FINANCIAL MATHEMATICAS AI1-205, Section 2, Spring 2011 QUIZ 1 Professor: Osvaldo Lagares, M.S. February 15, 2011 STUDENT ID: NAME: All questions must be answered in this test form! For each questions you must show your work and (or) provide a clear argument All graphs must be accurate to get credit. QUESTION 1 How much would you need to have in an investment account in Dominican Republic to earn RD\$400,000 in 4 months, if a broker offers you to invest in a portfolio that offers a simple rate of return of 2.81%? 5 Points I = RD\$400,000 R = 0.0281 T = 4/12 = 0.3333 I = P.R.T P = I / (R.T) P = \$400,000 / (0.0281 x 0.3333) P = RD\$42,704,626.33 Page 1 of 3

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QUESTION 2 The income of Mr. Burns is US\$5, 500. Find: a) The percentage paid to taxes, if the employer discount him US\$456. 1.25 points (x/100)(7,500)=456 X=456(100)/5500 X= 8.29% b) The income of his family, if his wife earns 25% less than him and both pay the same percentage of taxes . 1.25 points 5,500-(\$5,500 * 27%)=4,015 5,500+4,015=9,515 9,515 * 8.29% = 788.88 9,515- 788.88 = \$8,726.12 c) How much capital he deposits into his savings account? If he takes as capital 30% of his
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QUIZ_1_-_Section_2_-_Financial_Mathematics_-_Solution_Manual_Spring_2011

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