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FINA 3332 EXAM ONE QUESTIONS WITH 100% CORRECT ASWER
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FINA 3332 EXAM ONE QUESTIONS WITH 100% CORRECT ASWER FINA 3332 EXAM ONE QUESTIONS WITH 100% CORRECT ASWER
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FINA 3332 EXAM ONE 2024-2025 QUESTIONSWITH 100% CORRECT ASWER
As the discount rate increases, the present value of $500 to be received six years from
now: - CORRECT ANSWER decreases.
If you are figuring out how much you will have when you retire given your monthly
payment and an interest rate, you are: - CORRECT ANSWER Compounding
Today you made a student loan of $10,000 with the 5.5% annual interest rate. You will
be in school next four years and you do not have any obligation to make payments until
you graduate while the interest accumulates. How much will you owe in four years when
you start making payments? Round to the nearest cent. Do not include any unit (If your
answer is $111.11, then type 111.11 without $ sign.) - CORRECT ANSWER
12388.25
You want $1,000,000 when you retire in 40 years. You decided to save some money
every year next 40 years for your retirement. You are going to open Roth IRA and invest
everything in Vanguard S&P 500 Funds that expect to earn 6 percent annually. If your
contribution starts a year from today, how much must you contribute every year next 40
years? Round to the nearest cent. Do not include any unit (If your answer is $111.11,
then type 111.11 without $ sign.) - CORRECT ANSWER 6461.54
You are starting your new career today after graduating from University of Houston. You
decided to contribute $500 a month into a fund that is expected to earn 6 percent,
compounded monthly. If you start the contribution a month from today for 30 years,
how much will you have right after you contribute the last $500 in 30 years? Round to
the nearest cent. Do not include any unit (If your answer is $111.11, then type 111.11
without $ sign.) - CORRECT ANSWER 502257.52
,FINA 3332 EXAM ONE 2024-2025 QUESTIONS
WITH 100% CORRECT ASWER
You are starting medical school today. Becoming a doctor is your lifetime dream, so you
started saving money when you were little. You now have $200,000 in your account, and
you are going to withdraw annually starting today over the next four years. If you can
earn 3 percent interest on the account, how much a year can you withdraw? Round to
the nearest cent. Do not include any unit (If your answer is $111.11, then type 111.11
without $ sign.) - CORRECT ANSWER 52238.26
Toshi's Life Insurance Co. is trying to sell you an investment policy that will pay you and
your heirs $25,000 per year forever. If your required rate of return on this investment is
7%, how much the most are you willing to pay for the policy? Round to the nearest cent.
Do not include any unit (If your answer is $111.11, then type 111.11 without $ sign.) -
CORRECT ANSWER 357142.86
How much are you willing to pay for an investment that promises to pay $10,000 a year
in perpetuity if your required rate of return on this investment is 10 percent and the first
$10,000 payment starts in 10 years? Round to the nearest cent. Do not include any unit
(If your answer is $111.11, then type 111.11 without $ sign.) - CORRECT ANSWER
42409.76
The government has imposed a fine on the Not-So-Legal Company. The fine calls for
annual payments of $100,000, $250,000, and $250,000, respectively over the next
three years. The first payment is due one year from today. The government plans to
invest the funds until the final payment is collected and then donate the entire amount,
including investment earnings, to a national health center. The government will earn 3.5
percent on the funds held. How much will the national health center receive three years
, FINA 3332 EXAM ONE 2024-2025 QUESTIONS
WITH 100% CORRECT ASWER
from today? Round to the nearest cent. Do not include any unit (If your answer is
$111.11, then type 111.11 without $ sign.) - CORRECT ANSWER 615872.50
What is the effective annual yield of 6% compounded semi-annually? Answer in the
percent format. Round to the nearest hundredth percent. Do not include any unity (If
your answer is 4.36%, then enter 4.36 as your answer without % sign). - CORRECT
ANSWER 6.09
Which of the following statements is correct?
An annuity due has payments at the beginning of each period continues for fixed period.
An ordinary annuity has payments at the end of each period continues forever.
None of the above.
A perpetuity has inconsistent payments forever. - CORRECT ANSWER An annuity
due has payments at the beginning of each period continues for fixed period.
Which of the following is NOT considered in the time value of money?
Inflation
Opportunity Cost
Risk
All of the above are considered. - CORRECT ANSWER All of the above are
considered.
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