# Question 1 - Question 1 10 out of 10 points Present and...

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Question 1 10 out of 10 points Present and future value tables of \$1 at 3% are presented below: Carol wants to invest money in a 6% CD account that compounds semiannually. Carol would like the account to have a balance of \$50,000 five years from now. How much must Carol deposit to accomplish her goal? Answer Selected Answer: \$37,205. Correct Answer: \$37,205. Response Feedback: PV = \$50,000 x .744409* = \$37,205 *PV of \$1: n = 10; i = 3% Question 2 10 out of 10 points Present and future value tables of \$1 at 3% are presented below: At the end of the next four years, a new machine is expected to generate net cash

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flows of \$8,000, \$12,000, \$10,000, and \$15,000, respectively. What are the (rounded) cash flows worth today if a 3% interest rate properly reflects the time value of money in this situation? Answer Selected Answer: \$41,556. Correct Answer: \$41,556. Response Feedback: (\$8,000 x .97087) + (\$12,000 x .94260) + (\$10,000 x .91514) + (\$15,000 x .88849) = \$7,767 + 11,311 + 9,151 + 13,327 = \$41,556 Question 3 10 out of 10 points Present and future value tables of \$1 at 3% are presented below: At the end of each quarter, Patti deposits \$500 into an account that pays 12% interest compounded quarterly. How much will Patti have in the account in three years? Answer Selected Answer: \$7,096. Correct Answer:
\$7,096. Response Feedback: FVA = \$500 x 14.1920* = \$7,096 *FVA of \$1: n = 12; i = 3% Question 4 10 out of 10 points Present and future value tables of \$1 at 3% are presented below: Rosie's Florist borrows \$300,000 to be paid off in six years. The loan payments are semiannual with the first payment due in six months, and interest is at 6%. What is the amount of each payment? Answer Selected Answer: \$30,139. Correct Answer: \$30,139. Response Feedback: \$300,000 ÷ 9.95400* = *PVA of \$1: n = 12; i = 3% Question 5 10 out of 10 points Debbie has \$368,882 accumulated in a 401K plan. The fund is earning a low, but safe, 3% per year. The withdrawals will

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take place annually starting today. How soon will the fund be exhausted if Debbie withdraws \$30,000 each year? Answer Selected Answer: 15 years. Correct Answer: 15 years. Response Feedback: \$368,882 ÷ \$30,000 = 12.29607 For PVAD of \$1 factor of 12.29607 and i of 3%, n = 15 Question 6 10 out of 10 points Present and future value tables of \$1 at 3% are presented below: Jose wants to cash in his winning lottery ticket. He can either receive five, \$5,000 annual payments starting today, or he can receive a lump-sum payment now based on a 3% annual interest rate. What would be the lump-sum payment? Answer Selected Answer: \$23,586. Correct Answer:
\$23,586. Response Feedback: PVAD = \$5,000 x 4.71710* = \$23,586 *PVAD of \$1: n = 5; i = 3% Question 7 10 out of 10 points Reba wishes to know how much would be in her savings account if she deposits a given sum in an account and leaves it there at 6% interest for five years. She should use a table for the: Answer Selected Answer: Future value of 1. Correct Answer:

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Question 1 - Question 1 10 out of 10 points Present and...

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