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Mth. 103 - Finance Review Questions 1) An investor has $12,000.00 to invest in an account that Compounds Quarterly, he wants a DT of 6.5 years. At

what would be the doubling time for an investment be if the APR is 5 3/4% compounded monthly
Mth. 103 – Finance Review Questions 1) An investor has $12,000.00 to invest in an account that Compounds Quarterly, he wants a DT of 6.5 years. At what APR does he have to invest at in order to achieve that DT? ANS 10.807% 2) $14,600.00 is invested in an account that Compounds Continuously at a Nominal Rate of EMBED Equation.3 . What is the future value of this investment in 8 years? How long will it take in years for there to be $26,000.00 in the account? ANS $21349.36 3) How much would you pay for a 0 coupon bond that has an APR of 5%, compounded monthly, a maturity value of $2500.00, and a maturity time of 10 years? ANS $1517.90 4) What is the Effective Rate of $5500.00 invested at a Nominal Rate of 6.25% compounded monthly? ANS 6.43% 5) $1000.00 is put into a safe for a 10 year period. Over that ten year period there was an average annual inflation rate of EMBED Equation.3 . How much is the $1000.00 worth in constant dollars? ANS $781.20 6) What would the PV of an ordinary annuity have to be is a man wants to withdraw monthly payments of $5500.00 per month for 15 years? The Compounding is also monthly at an APR of 5.5%? ANS $673125.86 7) At what APR would one have to invest at to receive an APY of 7% if compounding is monthly? ANS 6.78% 8) A township has to replace a School in 9 years. the cost of building the school has been estimated at 7.8 million dollars, that is $7,800,000.00. They are setting up a sinking fund s.t. monthly payments will made at an APR of 6% for the 9 year period. Compounding is also monthly. How much do monthly payments have to be? ANS $54644.85 9) A man is buying an auto, the amount being financed is $32,500.00 for 5 years at an Effective rate of 4.75% compounded continuously. Fill in the table below. Column one is the monthly payment, column two is the total interest paid if the loan runs its entire length. monthly payment total int. paid total paid $609.74 $4084.36 $36584.36
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a) For the loan above and for the 30 th payment, provide the info below for what part of the payment is interest and what part is principal and the principal balance? Interest Principal Balance $70.41 $539.33 $17213.71 10) What is the (FV) of an ordinary annuity if payments of $650.00 per month are made for 30 years. The APR is 4.75% compounded monthly. ANS $516635.66 11) $8550.00 is invested at a Simple Interest rate of 6.35% per year. What is the FV of the investment in t = 8 years? What is the total interest earned over that time? ANS FV = $12893.40 INT = $4343.40
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