BUS 3301 Final Review || A+ Verified Solutions.
What is the present value of $10,000 in year 1, $20,000 year 2, $40,000 year 3? The required rate
is 10%. correct answers $55,762
0 CFj0
10,000 CFj1
20,000 CFj2
40,000 CFj3
10 i/y
NPV= 55,672
What is the future value of $30,000 invested per year for 30 years at a 10% annual rate? correct
answers $493,482
-3,000 PMT
30n
10 i/y
FV= 493,482
What is the present value of $100,000 to be received in 30 years at a 10% discount rate? correct
answers $5,731
100,000 FV
30n
10 i/y
PV= 5,731
What is the A.P.R if you invest at 12% compounded quarterly? correct answers 12.55%
12/4 = 3 i/y
-1 PV
3 i/y
4n
1.1255 - 1 = .1255
What is the present value of an annuity that pays you $100,000 per year for 20 years? (Use 6%
discount rate) correct answers $1,146,992
-100,000 PMT
20n
6 i/y
PV= 1,146,992
What would be the present value of the annuity in the previous questions if it begins 40 years in
the future? correct answers $111,513
1,146,992 FV
40n
6 i/y
PV= 111,513
, As the rate of inflation increases, correct answers bond prices fall
On the balance sheet, a mortgage loan is recorded as the correct answers current outstanding
balance
Another term sometimes used instead of net worth is correct answers equity
Molly invested $5,000 in an account she expects will earn 8% annually. Approximately how
many years will it take for the account to grow to $10,795? correct answers 10
-5,000 PV
8 i/y
10,795 FV
n=10
A progressive tax system is one in which higher-income people pay _______ than lower-income
people. correct answers both a and b are correct
(a higher dollar amount in taxes and a higher percentage in taxes)
If you can get 4% tax free what is the taxable equivalent yield for a person in a 36% marginal
bracket? correct answers 6.25%
tx eq= .04/1-.36 = .04/.64 = 6.25
when estimating expenditures for the budget correct answers use records of past expenditure
patterns
you want $4,000,000 at retirement in 45 years. At a 9% APR how much must you invest each
month? (hint 12 payments per year) correct answers $540
4,000,000 FV
45n
9 i/y
The major source(s) of revenue for state government is (are) correct answers a and d
(sales tax and income tax)
If you invest $10,000 at 7% compound interest for 10 years, what is the future value? correct
answers $19,672
10,000 PV
10 n
7 i/y
FV=19,672
A tax audit is correct answers IRS attempt to verify the accuracy of a return
A potential benefit of budgeting is correct answers all of the above (to reduce wasteful impulse
spending; to plan ahead for achieving your goals; to maintain good records for tax purposes; to
reduce family conflicts about finances)
