FINANCE 301 Exam Questions all with 100%
Correct Answers
What is the future value of your windfall in three years (on the date of the last
payment)? - ANSWER 76,943.38
You have just received a windfall from an investment project.It will be paying you
$15,000 at the end of the first year, $25,000 at the end of the second year, and $35,000
three years from today.The interest rate is 3.5% per year.What is the present value of
your windfall? - ANSWER 69,398.51
You have a loan outstanding. It requires making three annual payments of $1000 each
at the end of the next three years. Your bank has offered to allow you to skip making the
next two payments and instead to make one large payment at the end of the loan's
term in three years. The interest rate on the loan is 5%. What final payment will the
bank require you to make so that the bank is indifferent between the two forms of
payment? - ANSWER 3,152.5
You want to endow a scholarship that will pay $10,000 per year forever, starting one
year from now. The school's endowment discount rate is 7%.What amount must you
donate to endow the scholarship? - ANSWER 142,857.14
If you endow it today, but it makes the first award to a student 6 years from
today.Under this circumstance, what amount must you donate to endow the
scholarship? - ANSWER 101,855.17
When Alfred Nobel died, he left the majority of his estate to fund five prizes, each to be
awarded annually in perpetuity starting one year after he died.If he wanted the cash
award of each of the five prizes to be $45,000 and his estate could earn 7% per year.
And, suppose the cash award will grow by 4% per year.How much would he need to set
up the prizes today?
Correct Answers
What is the future value of your windfall in three years (on the date of the last
payment)? - ANSWER 76,943.38
You have just received a windfall from an investment project.It will be paying you
$15,000 at the end of the first year, $25,000 at the end of the second year, and $35,000
three years from today.The interest rate is 3.5% per year.What is the present value of
your windfall? - ANSWER 69,398.51
You have a loan outstanding. It requires making three annual payments of $1000 each
at the end of the next three years. Your bank has offered to allow you to skip making the
next two payments and instead to make one large payment at the end of the loan's
term in three years. The interest rate on the loan is 5%. What final payment will the
bank require you to make so that the bank is indifferent between the two forms of
payment? - ANSWER 3,152.5
You want to endow a scholarship that will pay $10,000 per year forever, starting one
year from now. The school's endowment discount rate is 7%.What amount must you
donate to endow the scholarship? - ANSWER 142,857.14
If you endow it today, but it makes the first award to a student 6 years from
today.Under this circumstance, what amount must you donate to endow the
scholarship? - ANSWER 101,855.17
When Alfred Nobel died, he left the majority of his estate to fund five prizes, each to be
awarded annually in perpetuity starting one year after he died.If he wanted the cash
award of each of the five prizes to be $45,000 and his estate could earn 7% per year.
And, suppose the cash award will grow by 4% per year.How much would he need to set
up the prizes today?
