Question 1

1. Today, you are purchasing a $1,093 5-year car loan at 8 percent. You will pay annually at the end of each year. What is the amount of each payment?

Question 2

1. The ABC Company is considering a new project which will require an initial cash investment of $15,870. The projected cash flows for years 1 through 4 are $5,630, $6,434, $8,928, and $4,501, respectively. If the appropriate discount rate is 9%, compute the NPV of the project.

Enter your answer rounded off to two decimal points. Do not enter $ in the answer box.

Question 3

1. If you receive $299 at the end of each year for the first three years and $617 at the end of each year for the next three years. What is the present value? Assume interest rate is 8%.

Hint: This is an uneven cash flow problem. Use the CF function and solve for NPV to get the answer.

Just enter the number up to 2 decimal points. Do not enter $ in the answer box

Question 4

1. 026:

Say, you deposit $1,541 in a bank for 19 years. What is the amount you will have in the bank at the end of 19 years if interest of 4 % for first 5 years and interest of 8 % for the remaining years? Note: Do not put $ sign in your answer. Simply write the number in the answer box.

Question 5

1. How much do you need to invest today in order to have $12,538 at the end of 16 years if you are sure to earn an interest at the rate of 3%? Note: Do not put $ sign in your answer. Simply write the number in the answer box.

Question 6

1. If you can triple your money in 24 years, what is the implied rate of interest? Note: Do not put % sign in your answer. Simply write the number in percentages in the answer box..

Question 7

1. 027:Say, you deposit $4,561 in a bank for 17 years. What is the amount you will have in the bank at the end of 17 years if interest of 4 % compounded monthly for first 8 years and interest of 7 % compounded quarterly for the remaining years? Note: Do not put $ sign in your answer. Simply write the number in the answer box.

Question 8

1. What is the future value of $1,860 for 7 years at 6 percent if interest is compounded semi-annually? Note: Do not enter “$” in your answer. Simply write down the number that you get as your answer.

Question 9

1. What is the future value of $2,786 invested for 9 years at 8% if interest is compounded quarterly? Note: Do not put $ sign in your answer. Simply write the number in the answer box.

Question 10

1. How many months it will take to grow your money from $4,730 to $7,028 if you can earn an interest of 5% compounded monthly? Note: Do not write “months” in your answer. Simply write the number in the answer box.

Question 11

1. Assume interest rate of 9%. Suppose that you receive $114,945 at the end of each year for 4 years. Suppose that this cash flow starts at the end of the fourth year. Compute the present value.

Do not enter the symbol $ in your answer. Simply enter the answer rounded off to two decimal points.

Question 12

1. How much do you need to invest today in order to have $6,756 at the end of 6 years if you are sure to earn an interest at the rate of 10%, if interest is compounded monthly? Note: Do not put $ sign in your answer. Simply write the number in the answer box.

$3,717.00

Question 13

1. What is the effective rate of 13% compounded monthly?

Do not enter the symbol % in your answer. Simply enter the answer in percentages rounded off to two decimal points.

Question 14

1. What should you be willing to pay in order to receive $916 annually forever, if you require 4% per year on the investment?

Just enter the number up to 2 decimal points. Do not enter $ in the answer box.

Question 15

1. 023A:If you can double your money in 7 years, what is the implied annual rate of interest, given that compounded semi-annually? Note: give your answer in percentages. Note: Do not put % sign in your answer. Simply write the number in percentages in the answer box.

Question 16

1. What is the future value of quarterly payments of $795 for 14 years at 6 percent?

Question 17

1. What is the future value of $1,419 invested for 20 years at 7% if interest is compounded semi-annually (twice a year)? Note: Do not put $ sign in your answer. Simply write the number in the answer box.

Question 18

1. How many years it will take to grow your money from $4,615 to $6,725 if you can earn an interest of 13% compounded quarterly? Note: Do not write “years” in your answer. Simply write the number in the answer box.

Question 19

1. Assume interest rate of 8%. A company receives cash flows of $542 at the end of year 5, $275 at the end of year 7, and $691 at the end of year 10. Compute the future value of this cash flow stream.

Question 20

1. How much do you need to invest today in order to have $683 at the end of 23 years if you are sure to earn an interest at the rate of 8%, if interest is compounded quarterly? Note: Do not put $ sign in your answer. Simply write the number in the answer box.

Question 21

1. What is the future value of annual payments of $3,598 for 19 years at 5 percent?

Question 22

1. How many years it will take to grow your money from $3,478 to $6,842 if you can earn an interest of 14% compounded monthly? Note: Do not write “years” in your answer. Simply write the number in the answer box.

Question 23

1. What is the future value of $4,254 invested for 12 years at 8% if interest is compounded semi-annually? Note: Do not put $ sign in your answer. Simply write the number in the answer box.

Question 24

1. How many years it will take you to double your money if you can earn 5% each year, given that compounding is quarterly? Note: Do not write “years” in your answer. Simply write the number in the answer box.

Question 25

1. Kelly starting setting aside funds 6 years ago to buy some new equipment for her firm. She has saved $607 each quarter and earned an average rate of return of 5 percent. How much money does she currently have saved for this purpose?

Question 26

1. Barrett Pharmaceuticals is considering a drug project that costs $174,959 today and is expected to generate end-of-year annual cash flows of $13,959, forever. At what discount rate would Barrett be indifferent between accepting and rejecting the project?

Just enter the number in percentages up to 2 decimal points. Do not enter % in the answer box.

Question 27

1. In order to buy a house, you take a loan of 100,000 at 7.5% for a period of 13 years. Compute the balance remaining at the end of 5 years.

Question 28

1. The ABC Company is considering a new project which will require an initial cash investment of $5,474. The project will produce no cash flows for the first 5 years. The projected cash flows for years 6 through 9 are $3,514, $3,809, $2,905, and $5,345, respectively. If the appropriate discount rate is 13%, compute the NPV of the project.