FIN+3403+EXAM+2+FALL+2006

# FIN+3403+EXAM+2+FALL+2006 - FIN 3403 EXAM 2 FALL 2006 Name...

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FIN 3403 EXAM 2 FALL 2006 Name: _________________________ Choose the closest answer to the question. Cell phones, notes, or hats are not allowed. 1. How much would you have to invest today at 9% compounded annually to have \$35,000 available for the purchase of a new car five years from today? A) \$28,150 B) \$22,748 C) \$20,267 D) \$26,370 E) \$24,147 2. If you invest \$15,000 today in an account that pays a fixed 7.5% compounded annually, how much do you have in five year? A) \$28,375 B) \$24,522 C) \$21,534 D) \$17,476 E) \$15,133 3. One hundred years ago, your great-great-grandfather purchased a rare masterpiece for \$125. Today you sold the painting for \$36 million. What is the compound annual rate of return for this investment? A) 9.11% B) 13.4% C) 10.09% D) 11.88% E) 11.99% 4. Granny puts \$25,000 into a bank account that earns 6% per year. You cannot touch the money until it doubles. How long do you have to wait? A) 14 years B) 20 years C) 9 years D) 8 years E) 12 years 5. If “r” is the interest rate, PV is the present value, and “t” is the number of investment periods, the future value of a lump sum is calculated as: A) PV(1 + r)(t) B) PV(1 + r - t) C) PV(1 + rt) D) PV(1 + r) t E) None of the above are correct. 6. The monthly mortgage payment (principal and interest) on your house is \$821.69. It is a 30 year mortgage at 6.5% compounded monthly. How much did you borrow? A) \$115,000 B) \$140,000 C) \$ 85,000 D) \$100,000 E) \$130,000

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7. If you save \$200 per month for the next 20 years at 12%, what is your account balance at the end of 20 years? A)
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## This note was uploaded on 02/09/2012 for the course MGT 3078 taught by Professor Marchman during the Spring '12 term at Georgia Tech.

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FIN+3403+EXAM+2+FALL+2006 - FIN 3403 EXAM 2 FALL 2006 Name...

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