Finance Homework Management

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Question 2

1.       If the effective rate is 19%. What is the nominal rate if compounding is daily. Do not enter the symbol % in your answer. Simply enter the answer in percentages rounded off to two decimal points.

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Question 3

1.       The ABC Company is considering a new project which will require an initial cash investment of $14,864. The projected cash flows for years 1 through 4 are $9,722, $9,118, $8,632, and $5,842, respectively. If the appropriate discount rate is 11%, compute the NPV of the project.

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

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Question 4

1.       How many months it will take to grow your money from $4,712 to $7,580 if you can earn an interest of 16% compounded monthly? Note: Do not write "months" in your answer. Simply write the number in the answer box.

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1 points

Question 5

1.       What is the effective rate of 18% compounded monthly?

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

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1 points

Question 6

1.       How much do you need to invest today in order to have $14,899 at the end of 12 years if you are sure to earn an interest at the rate of 11%? Note: Do not put $ sign in your answer. Simply write the number in the answer box.

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1 points

Question 7

1.       What is the future value of $2,029 invested for 6 years at 12% 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.

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1 points

Question 8

1.       If you can double your money in 19 years, what is the implied annual rate of interest, given that compounded in quarterly? Note: give your answer in percentages. Note: Do not put % sign in your answer. Simply write the number in percentages in the answer box.

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Question 10

1.       How many years it will take you to quadruple (means 4 times) your money if you can earn 7% each year? Note: Do not write "years" in your answer. Simply write the number in the answer box.

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1 points

Question 11

1.       What is the future value of $359 invested for 10 years at 13% if interest is compounded quarterly? Note: Do not put $ sign in your answer. Simply write the number in the answer box.

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1 points

Question 12

1.       What is the future value of annual payments of $6,087 for 17 years at 5 percent?

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1 points

Question 13

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.

Do not enter the symbol $ in your answer. Enter your answer as a positive number. Simply enter the answer rounded off to two decimal points.

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1 points

Question 14

1.       The Perpetual Life Insurance Co is trying to sell you an investment policy that will pay you and your heirs $12,471 per year forever. Suppose the Perpetual Life Insurance Co. told you the policy costs $180,064. At what interest rate would this be a fair deal? Just enter the number in percentages up to 2 decimal points. Do not enter % in the answer box.

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1 points

Question 15

1.       If you can triple your money in 18 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..

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1 points

1 points

Question 17

1.       What is the future value of $4,357 invested for 29 years at 18% if interest is compounded semi-annually? Note: Do not put $ sign in your answer. Simply write the number in the answer box.

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1 points

Question 18

1.       How many years it will take to grow your money from $3,308 to $9,537 if you can earn an interest of 15% compounded quarterly? Note: Do not write "years" in your answer. Simply write the number in the answer box.

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1 points

Question 19

1.       What is the future value of $661 for 15 years at 6 percent if interest is compounded semi-annually? Note: Do not enter "$" in your answer. Simply write down the number that you get as your answer.

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1 points

Question 20

1.       026:

Say, you deposit $1,493 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 7 % for first 10 years and interest of 9 % for the remaining years? Note: Do not put $ sign in your answer. Simply write the number in the answer box.

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1 points

Question 21

1.       How much do you need to invest today in order to have $4,498 at the end of 28 years if you are sure to earn an interest at the rate of 15%, if interest is compounded monthly? Note: Do not put $ sign in your answer. Simply write the number in the answer box.

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1 points

Question 22

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?

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1 points

Question 23

1.       Assume interest rate of 3%. A company receives cash flows of $967 at the end of year 5, $316 at the end of year 7, and $624 at the end of year 10. Compute the future value of this cash flow stream.

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

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1 points

Question 24

1.       How many years it will take to grow your money from $3,641 to $7,248 if you can earn an interest of 13% compounded monthly? Note: Do not write "years" in your answer. Simply write the number in the answer box.

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1 points

Question 25

1.       How much do you need to invest today in order to have $9,131 at the end of 25 years if you are sure to earn an interest at the rate of 9%, if interest is compounded quarterly? Note: Do not put $ sign in your answer. Simply write the number in the answer box.

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1 points

Question 26

1.       What is the future value of quarterly payments of $562 for 14 years at 6 percent?

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1 points

Question 27

1.       If you receive $110 at the end of each year for the first three years and $794 at the end of each year for the next three years. What is the present value? Assume interest rate is 4%.

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.

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1 points

Question 28

1.       027:

Say, you deposit $4,879 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 6 % compounded monthly for first 9 years and interest of 6 % compounded quarterly for the remaining years? Note: Do not put $ sign in your answer. Simply write the number in the answer box.

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1 points

Question 29

1.       023A:

If you can double your money in 23 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.

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1 points

Question 30

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.

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1 points

1 points

Question 33

1.       Assume interest rate of 6%. Suppose that you receive $97,408 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.

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1 points

Question 34

1.       What should you be willing to pay in order to receive $259 annually forever, if you require 5% per year on the investment?

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

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1 points

Question 35

1.       How many years it will take you to double your money if you can earn 9% each year, given that compounding is quarterly? Note: Do not write "years" in your answer. Simply write the number in the answer box.

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1 points

Question 36

1.       Assume interest rate of 4%. A company receives cash flows of $81,403 at the end of years 4, 5, 6, 7, and 8, and cash flows of $289,772 at the end of year 10. Compute the future value of this cash flow stream.

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

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