This is a closed book test. You have to write the answer on ANSWER SHEET and No

Question

This is a closed book test. You have to write the answer on ANSWER SHEET and No electronics devices (cell phone, ipad, notebook, etc) are allowed. 1.) A sum of $500,000 will be invested by a firm two years from now. If money is worth 12%, what will be the worth of this investment 10 years from now? A. $1,553,000 B. $1,569,000 C. $1,463,100 D. $1,238,000 2) For the cash flow diagram below, determine the value of P 10,000 0 10 20 $3,000 i= 10% C. $71 D. $147.20 A. $119.26 3.) Ben invested $20,000 into a money market account and took out $5,000 at the end of year 5. He found out at the end of 10 years that he had a of $50,000 in the account.What is the annual interest rate Ben had earned on this investment? B. $195.49 B. 12.93% C. 15.23% D. 11.5% A, 8% 4.) The annual maintenance cost of a monument in the state capital is estimated to be $4850. A peripheral fund of $100,000 is set up to pay for this maintenance expenditure. Determine the interest rate this fund earns if the interest is compounded quarterly A. 4.58% B.4.76% C.4.39% D. None of these

Explanation / Answer

1.

Value of invested after 2 year = $500,000

value of investment after 10 year = 8 year of investment horizon

Value of investment after 10 year = $500,000 × (1 + 12%) ^ 8

= $500,000 × 2.4760

= $1,237,981.59.

Value of investment after 10 year is $1,237,981.59.

Option (D) is correct answer.

Related Questions

Navigate

• Browse (All)
• Browse T
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.