Managerial Finance Exam Questions
with Answers
First City Bank pays 7.5 percent simple interest on its savings account balances, whereas Second
City Bank pays 7.5 percent interest compounded annually. If you made a deposit of $8,600 in
each bank, how much more money would you earn from your Second City Bank account at the
end of eight years? - ✔✔Simple: $13,760
Compound: $15,337.91
Answer = $1,577.91
Compute FV:
PV = $2,597
Years = 11
Interest Rate = 13% - ✔✔$9,961.73
Compute FV:
PV = $7,834
Years = 7
Interest Rate = 9% - ✔✔$14,320.86
Compute FV:
PV = $81,286
Years = 14
Interest Rate = 12% - ✔✔$397,253.81
Compute FV:
PV = $213,612
, Years = 16
Interest Rate = 6% - ✔✔$542,649.60
Compute PV:
FV = $16,832
Years = 17
Interest Rate = 9% - ✔✔$3,889.42
Compute PV:
FV = $48,318
Years = 9
Interest Rate = 7% - ✔✔$26,281.79
Compute PV:
FV = $886,073
Years = 23
Interest Rate = 13% - ✔✔$53,292.40
Compute PV:
FV = $550,164
Years = 35
Interest Rate = 21% - ✔✔$696.63
Solve for R:
PV = $181
Years = 8
FV = $317 - ✔✔7.26%
with Answers
First City Bank pays 7.5 percent simple interest on its savings account balances, whereas Second
City Bank pays 7.5 percent interest compounded annually. If you made a deposit of $8,600 in
each bank, how much more money would you earn from your Second City Bank account at the
end of eight years? - ✔✔Simple: $13,760
Compound: $15,337.91
Answer = $1,577.91
Compute FV:
PV = $2,597
Years = 11
Interest Rate = 13% - ✔✔$9,961.73
Compute FV:
PV = $7,834
Years = 7
Interest Rate = 9% - ✔✔$14,320.86
Compute FV:
PV = $81,286
Years = 14
Interest Rate = 12% - ✔✔$397,253.81
Compute FV:
PV = $213,612
, Years = 16
Interest Rate = 6% - ✔✔$542,649.60
Compute PV:
FV = $16,832
Years = 17
Interest Rate = 9% - ✔✔$3,889.42
Compute PV:
FV = $48,318
Years = 9
Interest Rate = 7% - ✔✔$26,281.79
Compute PV:
FV = $886,073
Years = 23
Interest Rate = 13% - ✔✔$53,292.40
Compute PV:
FV = $550,164
Years = 35
Interest Rate = 21% - ✔✔$696.63
Solve for R:
PV = $181
Years = 8
FV = $317 - ✔✔7.26%
