1) How long will it take (pick the closest answer) to double your money (eg grow

Question

1) How long will it take (pick the closest answer) to double your money (eg grow $100 to S200 can invest at a rate of 15% per year? you a) 5 years b) 7 years c) 10 years d) 15 years You notice the following APR rates offered by your local banks. All are FDIC insured, which is offering you the highest return? 2) Bank APR% 5.000% 4.925% 4.900% 4.850% compounding frequency Annually Semi-annually Monthly Daily a) Bank A b) BankB c) Bank C d) Bank D Sweet Treats common stock is currently priced at $18.53 a share. The company just paid $1.25 per share as its annual dividend. The dividends have been increasing by 2.5 percent annually and are expected to continue doing the same. Based on the Gordon (or Constant) Growth Model what ist firm's cost of equity (i.e. discount rate expected by investors)? 3) a) 6.03% b) 6.18% c) 8.47% d) 9.41% e) 9.82% Suppose that you wish to buy a new Honda Accord which costs $24,995. If you put down 10% and finance the rest at 3% APR for the next 60 months, paid at the end of each month, what your monthly payments be? 4) a) $404.21 b) $449.13 c) $812.83

Explanation / Answer

1) How long it takes to double your money

FV = PV*(1+r)^n

2=1*(1+0.15)^n

2 =1.15^n

n = log 2/ log 1.15 = 4.95 years

n = 5 years (Option A)

Answer : A : 5 years

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