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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