FIN 3403 EXAM 2 FALL 2006
Choose the closest answer to the question.
Cell phones, notes, or hats are not allowed.
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?
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?
One hundred years ago, your great-great-grandfather purchased a rare masterpiece for $125.
you sold the painting for $36 million.
What is the compound annual rate of return for this investment?
Granny puts $25,000 into a bank account that earns 6% per year.
You cannot touch the money until it
How long do you have to wait?
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:
PV(1 + r)(t)
PV(1 + r - t)
PV(1 + rt)
PV(1 + r)
None of the above are correct.
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?