INTRODUCTORY FINANCIAL MANAGEMENT - ULOWA
EXAM
If you invest $5000 in a 2-year CD and the CD has a return of 4% per year, how
much is your investment worth at the end of two years? - ANSWER N = 2
PV = 5,000
I = 4%
PMT = 0
PV =?
5408
How many years would it take to double your money, if you could invest it at 2%
per year - ANSWER 9
Rule of 72: (72/8%) = 9
What price would you be willing to pay for an investment that delivers $1000 in 3
years if your required return is 6% per year? - ANSWER Basically, what is the
present value:
N=3
I = 6%
PMT = 0
FV = $1000
PV?
839.6193
What should you be willing to pay for an investment that promises $8 per year
forever if your required return is 8% per year - ANSWER 100
EXAM
If you invest $5000 in a 2-year CD and the CD has a return of 4% per year, how
much is your investment worth at the end of two years? - ANSWER N = 2
PV = 5,000
I = 4%
PMT = 0
PV =?
5408
How many years would it take to double your money, if you could invest it at 2%
per year - ANSWER 9
Rule of 72: (72/8%) = 9
What price would you be willing to pay for an investment that delivers $1000 in 3
years if your required return is 6% per year? - ANSWER Basically, what is the
present value:
N=3
I = 6%
PMT = 0
FV = $1000
PV?
839.6193
What should you be willing to pay for an investment that promises $8 per year
forever if your required return is 8% per year - ANSWER 100
