FIN 300 Final Exam | 40 Questions Solved 100%
Correct | Verified Answers
What is the present value of an account worth $50,000 that has earned 6% interest over
4 years? - ANSWER Input in calculator:
FV: 50,000
I: 6
N: 4
CPT
PV= 39,604.68
What is the future value of $5,000 if it earned 8% interest for 6 years? - ANSWER PV: (-
5,000)
I: 8%
N: 6
CPT
FV = 7,934.37
Dan & Jia are newlyweds and have just purchased a condominium for $70,000. Since the
condo is very small, they hope to move into a single-family house in 5 years. How much
will their condo be worth in 5 years if inflation is expected to be 8%? - ANSWER PV: (-
70,000)
I: 8
N:5
CPT
FV = 102,853
, Colin has inherited $6,000. He would like to use the money to buy his mom a new
scooter costing $7,000, two years from now. Will Colin have enough money to buy the
gift if he deposits his money in an account paying 8% compounded semiannually? -
ANSWER *divide % by 2* *multiply years by 2*
PV: (-6,000)
I: 4
N: 4
CPT
FV = 7,019.15
Nancy would like to accumulate $10,000 by the end of 3 years from now to buy a sports
car from her friend. she has $2,500 now and would like to save equal annual deposits to
pay for the car. How much should she deposit at the end of each year in an account
paying 8% to buy the car? - ANSWER FV: 10,000
N: 3
PV: (-2,500)
I: *
CPT
PMT = 2,110.25
Real Interest Rate - ANSWER nominal rate - inflation rate
Par Value : 1,000
coupon rate: 9%
years to maturity: 5
required return: 6
calculate the current value of the bond. - ANSWER *multiply coupon rate by par value to
get pmt*
Correct | Verified Answers
What is the present value of an account worth $50,000 that has earned 6% interest over
4 years? - ANSWER Input in calculator:
FV: 50,000
I: 6
N: 4
CPT
PV= 39,604.68
What is the future value of $5,000 if it earned 8% interest for 6 years? - ANSWER PV: (-
5,000)
I: 8%
N: 6
CPT
FV = 7,934.37
Dan & Jia are newlyweds and have just purchased a condominium for $70,000. Since the
condo is very small, they hope to move into a single-family house in 5 years. How much
will their condo be worth in 5 years if inflation is expected to be 8%? - ANSWER PV: (-
70,000)
I: 8
N:5
CPT
FV = 102,853
, Colin has inherited $6,000. He would like to use the money to buy his mom a new
scooter costing $7,000, two years from now. Will Colin have enough money to buy the
gift if he deposits his money in an account paying 8% compounded semiannually? -
ANSWER *divide % by 2* *multiply years by 2*
PV: (-6,000)
I: 4
N: 4
CPT
FV = 7,019.15
Nancy would like to accumulate $10,000 by the end of 3 years from now to buy a sports
car from her friend. she has $2,500 now and would like to save equal annual deposits to
pay for the car. How much should she deposit at the end of each year in an account
paying 8% to buy the car? - ANSWER FV: 10,000
N: 3
PV: (-2,500)
I: *
CPT
PMT = 2,110.25
Real Interest Rate - ANSWER nominal rate - inflation rate
Par Value : 1,000
coupon rate: 9%
years to maturity: 5
required return: 6
calculate the current value of the bond. - ANSWER *multiply coupon rate by par value to
get pmt*
