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FINA 3332 Exam 1 (2026) Exam Questions &
Answers | Latest Already Graded A+ UPDATE |2026
Today you made a student loan of $10,000 with the 5.5% annual
interest rate. You will be in school next four years and you do not have
any obligation to make payments until you graduate while the interest
accumulates. How much will you owe in four years when you start
making payments? Round to the nearest cent. Do not include any unit
(If your answer is $111.11, then type 111.11 without $ sign.)
......ANSWER......12388.25
You want $1,000,000 when you retire in 40 years. You decided to save
some money every year next 40 years for your retirement. You are
going to open Roth IRA and invest everything in Vanguard S&P 500
Funds that expect to earn 6 percent annually. If your contribution starts
a year from today, how much must you contribute every year next 40
years? Round to the nearest cent. Do not include any unit (If your
answer is $111.11, then type 111.11 without $ sign.)
......ANSWER......6461.54
You are starting your new career today after graduating from University
of Houston. You decided to contribute $500 a month into a fund that is
expected to earn 6 percent, compounded monthly. If you start the
contribution a month from today for 30 years, how much will you have
right after you contribute the last $500 in 30 years? Round to the
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nearest cent. Do not include any unit (If your answer is $111.11, then
type 111.11 without $ sign.) ......ANSWER......502257.52
You are starting medical school today. Becoming a doctor is your
lifetime dream, so you started saving money when you were little. You
now have $200,000 in your account, and you are going to withdraw
annually starting today over the next four years. If you can earn 3
percent interest on the account, how much a year can you withdraw?
Round to the nearest cent. Do not include any unit (If your answer is
$111.11, then type 111.11 without $ sign.) ......ANSWER......52238.26
Toshi's Life Insurance Co. is trying to sell you an investment policy that
will pay you and your heirs $25,000 per year forever. If your required
rate of return on this investment is 7%, how much the most are you
willing to pay for the policy? Round to the nearest cent. Do not include
any unit (If your answer is $111.11, then type 111.11 without $ sign.)
......ANSWER......357142.86
How much are you willing to pay for an investment that promises to pay
$10,000 a year in perpetuity if your required rate of return on this
investment is 10 percent and the first $10,000 payment starts in 10
years? Round to the nearest cent. Do not include any unit (If your
answer is $111.11, then type 111.11 without $ sign.)
......ANSWER......42409.76
The government has imposed a fine on the Not-So-Legal Company. The
fine calls for annual payments of $100,000, $250,000, and $250,000,
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respectively over the next three years. The first payment is due one year
from today. The government plans to invest the funds until the final
payment is collected and then donate the entire amount, including
investment earnings, to a national health center. The government will
earn 3.5 percent on the funds held. How much will the national health
center receive three years from today? Round to the nearest cent. Do
not include any unit (If your answer is $111.11, then type 111.11
without $ sign.) ......ANSWER......615872.50
What is the effective annual yield of 6% compounded semi-annually?
Answer in the percent format. Round to the nearest hundredth percent.
Do not include any unity (If your answer is 4.36%, then enter 4.36 as
your answer without % sign). ......ANSWER......6.09
Which of the following statements is correct?
An annuity due has payments at the beginning of each period continues
for fixed period.
An ordinary annuity has payments at the end of each period continues
forever.
None of the above.
A perpetuity has inconsistent payments forever. ......ANSWER......An
annuity due has payments at the beginning of each period continues for
fixed period.
Which of the following is NOT considered in the time value of money?
FINA 3332 Exam 1 (2026) Exam Questions &
Answers | Latest Already Graded A+ UPDATE |2026
Today you made a student loan of $10,000 with the 5.5% annual
interest rate. You will be in school next four years and you do not have
any obligation to make payments until you graduate while the interest
accumulates. How much will you owe in four years when you start
making payments? Round to the nearest cent. Do not include any unit
(If your answer is $111.11, then type 111.11 without $ sign.)
......ANSWER......12388.25
You want $1,000,000 when you retire in 40 years. You decided to save
some money every year next 40 years for your retirement. You are
going to open Roth IRA and invest everything in Vanguard S&P 500
Funds that expect to earn 6 percent annually. If your contribution starts
a year from today, how much must you contribute every year next 40
years? Round to the nearest cent. Do not include any unit (If your
answer is $111.11, then type 111.11 without $ sign.)
......ANSWER......6461.54
You are starting your new career today after graduating from University
of Houston. You decided to contribute $500 a month into a fund that is
expected to earn 6 percent, compounded monthly. If you start the
contribution a month from today for 30 years, how much will you have
right after you contribute the last $500 in 30 years? Round to the
,2|Page
nearest cent. Do not include any unit (If your answer is $111.11, then
type 111.11 without $ sign.) ......ANSWER......502257.52
You are starting medical school today. Becoming a doctor is your
lifetime dream, so you started saving money when you were little. You
now have $200,000 in your account, and you are going to withdraw
annually starting today over the next four years. If you can earn 3
percent interest on the account, how much a year can you withdraw?
Round to the nearest cent. Do not include any unit (If your answer is
$111.11, then type 111.11 without $ sign.) ......ANSWER......52238.26
Toshi's Life Insurance Co. is trying to sell you an investment policy that
will pay you and your heirs $25,000 per year forever. If your required
rate of return on this investment is 7%, how much the most are you
willing to pay for the policy? Round to the nearest cent. Do not include
any unit (If your answer is $111.11, then type 111.11 without $ sign.)
......ANSWER......357142.86
How much are you willing to pay for an investment that promises to pay
$10,000 a year in perpetuity if your required rate of return on this
investment is 10 percent and the first $10,000 payment starts in 10
years? Round to the nearest cent. Do not include any unit (If your
answer is $111.11, then type 111.11 without $ sign.)
......ANSWER......42409.76
The government has imposed a fine on the Not-So-Legal Company. The
fine calls for annual payments of $100,000, $250,000, and $250,000,
, 3|Page
respectively over the next three years. The first payment is due one year
from today. The government plans to invest the funds until the final
payment is collected and then donate the entire amount, including
investment earnings, to a national health center. The government will
earn 3.5 percent on the funds held. How much will the national health
center receive three years from today? Round to the nearest cent. Do
not include any unit (If your answer is $111.11, then type 111.11
without $ sign.) ......ANSWER......615872.50
What is the effective annual yield of 6% compounded semi-annually?
Answer in the percent format. Round to the nearest hundredth percent.
Do not include any unity (If your answer is 4.36%, then enter 4.36 as
your answer without % sign). ......ANSWER......6.09
Which of the following statements is correct?
An annuity due has payments at the beginning of each period continues
for fixed period.
An ordinary annuity has payments at the end of each period continues
forever.
None of the above.
A perpetuity has inconsistent payments forever. ......ANSWER......An
annuity due has payments at the beginning of each period continues for
fixed period.
Which of the following is NOT considered in the time value of money?
