Here is an example...This problem set covers simple and compound interest, future value, present value, implied interest rate and number of years, companies and growth rates, future value of...

1. Simple versus compound interest
a. Heather deposited $1600.....
- $2563.20
b. If credit union pays Heather....
- $2850.55
c. Before deciding to deposit her money at the credit union....
- $2902.64
2. Future value
a. If you invest $ 3000 at 5% annual ...
- $4432.37
b. Each line on the following graph corresponds to...
- A: 22%, B: 11%, C: 0%
3. Present value
a. Which of the following investment that pays $ 19000....
- Security that earns an interest rate of 11.50%
b. Eric wants to invest in government securities....
- An investment that matures in 3 years
c. Which of the following is true about present value calculations...
- Other things remaining equal, the present value of a cash flow in the future
decreases if the investment time period increases
4. Implied interest rate and the number of years
a. If a security of $ 5,600 will be worth...
- 4 %
b. If an investment of $ 30,000 is earning an interest rate of 12 %.....
- 9 years
c. Which of the following statements is true...
- 2nd statement is true
5. Companies and growth rates
a. Germany was a growing market for Coca Cola...
- 1934-1936: 102.86 % 1936-1939: 65.10% 1934-1939: 79.28%
b. During world war II, Coca Cola Co. Cut off....
- 149 million cases
c. If Coca cola’s world wide growth were to continue...
- 114.22 billion cases
6. Future vaue of annuities
a. Which of the following statements about annuities...
- Statements 1,2, and 3 are true
b. Which of the following is an example of an annuity
- A retirement fund set up to pay a series of regular payments
c. Luana loves shopping for clothes....
- $ 2,448.60
d. If Luana deposits the money at the beginning...
- $ 3859.46
7. Present value of annuities and annuity payments
a. You have the opportunity to invest in several annuities....
- 3rd statement
b. An ordinary annuity selling at $ 11,107.31 today....
- $ 2357.14
c. You just won the lottery...
- In PV terms you won $ 444.6 million
8. Implied interest rate and periods
a. David inherited an annuity worth $ 4,113.00 from....
- 5.00 %
b. David’s friend Chris wants to go to business school...
- 5.10 years
9. Mortgage payments
a. You have decided to buy a house that is valued at $1 million
- $ 8,886.54
b. Your friends suggest that you take a 15-year mortgage....
- $ 1,101.52
c. It is likely that you won’t like the prospect of paying more money..
- $ 1,401,303
d. Which of the following statements is not True about mortgages ?
- Mortgages always have a fixed nominal interest rate
10. Perpetuities
a. Which of the following are characteristics of a...