Use the data in table 3.1 to answer the following question(s): Year 5 Factor 1.4

Question

Use the data in table 3.1 to answer the following question(s): Year 5 Factor 1.403 Year 5 Factor 0.713 Year 5 Year 5 710 7% Present value of $1 Future value of a $1 ordinary annuity 7% Present value of a $1 ordinary annuity 7% Factor 5751 Factor 4.100 Table 3.1 17) Refer to Table 3.1 above. How much will you have if you deposit $1,000 each year for the next 517) years in an account paying 7%? A) $1,403 B) $713 ) $5,751 D) $4,100 18) Financial institutions that accept deposits (that are insured up to a maximum level) from 18) individuals and provide loans are called A) investment companics. 0 depository institutions B) finance companies D) nondepository institutions. 19) What would be the annualized return to an investor who purchases a one-year $10,000 T-bill for 19) $9,600 and sells it on the secondary market 90 days after the purchase for $9,750? A) 10.14% B) 3.5% C) 6.34% D) 16.22% 20) At your place of employment, which of the following is acceptable? 20) A) Use of your Social Security number as an employee number on your time B) Inclusion of your Social Security number on your employee identity badge ) Inclusion of your Social Security number on your paycheck D) Inclusion of your Social Security number on your payroll registry in the accounting office 21) In comparing credit cards, which of the following is false? 21) A) Some cards offer a teaser interest rate. B) Some cards are more widely accepted than others. C) Some cards charge an annual fee and others do not. D) Some cards allow you to alwavs carry a balanee from mantk

Explanation / Answer

17. C = 1000 * (FV, 7%, 5) = 1000* 5.751 (from the table) = $5,751

18. C Depository institutions

19. C 6.34%

Yield = (Sale price - Purchase price) / Sale price * 365/n = (9750 - 9600) / 9750 * 365/90 = 6.34%

20. D Social security number can be included in payroll register in the accouting office for income tax purposes

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