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FIN 3403 exam 1 question 2

# FIN 3403 exam 1 question 2 - 1 If you put \$2,400 into an...

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1. If you put \$2,400 into an account at the end of each year for the next 10 years, and at the end of 10 years you have \$84567 in your account, what was the annual compound rate of return on your account? (26.17%) 2. You can invest your money at 7.75% compounded monthly. What is your equivalent annual rate of return? (8.03%) 3. What is the quoted APR(annual percentage rate) that corresponds to an EAR of 9% if compounding occurs daily? (8.6188%) 4. What is the value today of an annuity of \$4,500 per year if the first payment occurs 6 years from today and the last payment is make 19 years from today? The discount rate if 7.5 percent compounded annually. (\$26,609.37) 5. You want to put equal annual deposits in an account at the end of each of the next five years so that you will be able to make withdrawals of \$50,000 a year for ten years with the first withdrawal coming six years from today. If your account earns interest at the rate of 8% compounded annually, how much must you deposit each year? (\$57,188.83) 6. Computer the present value of \$50,000 discounted for 5 years at (a) 12% (\$28,371.34) at (b) 10% compounded quarterly (\$30,513.55)

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