SM132 Quiz One Questions

Inez wants to have $13,500 in 5 years. Use the present value formula to calculate how much Inez should invest now at 4% interest, compounded quarterly in order to reach her goal.   a. $10,800.00 b. $11,056.54     c. $11,063.85 d. $11,096.02

Math 3 Suppose you are offered two options: (i) receive Taka 30,000 at the end of 5 years or (ii) receive Taka P today and another P after two years. When you invest the Takas in business that pays 8% or more profit yearly. What value of P would be same as promise of Taka 30,000 to you after 5 years? Assume there is no risk in this future payment.

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What refers to the ratio of the interest payment to the principal for a given unit of time and usually expressed as a percentage of the principal? Select one: a. Rate of return b. Interest rate c. Yield 29 d. Return of investment

of the present value of The present value of a fixed-payment loan is calculated as the all cash flow payments. Select one: a. log b. sum c. multiple d. difference

Give typing answer with explanation and conclusion  Gustav Co. is planning to issue new 30-year bonds. The current plan is to make the bonds non-callable, but this may be changed. If the bonds are made callable after 5 years at a 5% call premium, how would this affect their required rate of return? Question 6 options: There is no reason to expect a change in the required rate of return. The required rate of return would increase because the bond would then be?

3. You are looking to retire in 35 years and your company has a 401K plan that has a 5.2% annual return. You deposit $400 a month from your paycheck into the account. Calculate the amount of your retirement when you retire.

When investing or saving money for retirement, which type of interest would benefit the most from? Fixed Variable Simple Compound

Problem 3 An investor bought a discount bond with face value of $1,000 at the price of $870. The bond matures in three years. What is the rate of return? Problem 6 You lend $1,000 today. The borrower promises to return $1,500 in 8 years from now. What is the yield to maturity of this loan?

Ali invests a certain amount of money today. The process of determining how much money that investment will produce in the future is called Select one: a. present value b. discounting 10 c. Compounding d. annuitizing the cash flow

18. Suppose your city is building a new park, and issues bonds to raise the money to build it. You obtain a $1,000 bond that pays 5% simple interest annually that matures in 5 years. How much interest will you earn?

Which of the following should give you better returns? a. One and a half years rate of interest of 8 percent b. Semi-annual 4 percent rate of interest for 2.5 years c. Quarterly rate of interest of 5% for 2 years

You are thinking of investing $3600 this year. You have received advice from family members. • Aunt Anne recommends investing in the stock market with a 9.45% average rate of return. • Uncle Rick recommends investing in a 5.60% certificate of deposit (CD). • Grandpa recommends investing in a 0.53% savings account. How much money will you have at the end of 10 years if you pick Aunt Anne's advice? money after 10 years: S How much money will you have at the end of 20 years if you pick Uncle Rick's advice? money after 20 years: $ How much money will you have at the end of 40 years if you pick Grandpa's advice? money after 40 years: $

2. An investment will provide $10,000 at the end of 3 years. The investment receives interest at 12% compounded annually. a. What is the present value of the investment?

Need help urgently Only typed answer needed Handwritten answer not allow  On May 1, Emerson Fast bought 10 Manitoba Polar bonds with a coupon rate of 7.875%. The purchase price was 101.375, and the commission was $8 per bond. Manitoba Polar bonds pay interest on April 1 and October 1.   a. What is the current yield of the bond?   b. What is the total purchase price of the bonds?   c. If Emerson sold the bonds on August 1 for 109.50, what are the proceeds from the sale?

QUESTION S What is the price of a three-year zero-coupon bond with a face value of $3000 when the interest rate is 5%?

For the following questions, choose the letter of the best answer (Show any work and explanations): 1. A home loan is taken out for $162,000. The loan is for 30 years, with a nominal annual rate of 7.5%,resulting in monthly payments of $1,132.73. The interest portion of the first payment will be what? a) $1,012.50 b) $682.73 c) $120.23 d) Answer cannot be determined without more information   2. A $100,000 asset has a $20,000 salvage value after its 10-year useful life. The depreciation allowanceusing straight-line depreciation is closest to what value? a) $2,000 b) $8,000 c) $10,000 d) $12,000   3. With reference to the straight-line depreciation method, which statement is false? a) The deprecation life (n) is set based on the MACRS property classes. b) An equal amount of depreciation is allocated in each year. c) The book value of the asset decreases by a fixed amount each year. d) The asset is depreciated down to a book value equal to the salvage value.   4. This past year, CLL…

Which one give extra profit? Please show your working!!

If you put your $100 into a saving account which earns 5% interest, how long does it take for your money to double?

You have two investments to choose from. Investment A pays an interest rate of 5% for 2 years and Investment B pays an interest rate of 2% for 5 years. Given that you have $100 to invest and can only choose from investment A or B, Which one should you choose?

11. The face value of a bond is $10,000, and the annual coupon payment is $850. What is the coupon rate?

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you have been working as a manager of a fashion store. You saved 50,000 and you decided to use the money to start your own business, You decided to use the money you saved to buy materials, you als decided to utilize a store you own to home your business. The store you used for your business could have been rented for 8,000 a year. You hired a clerk to help you in the store that will cost you 20,000 per year. The interest you could have earned on the 50,000 you used to buy the materials was 3,000 per year. Futhermore, you decided to manage your own business and you decided to quit your job that was paying 28,000 per year . You paid 8,000 for utility. What is yor explicit cost? Assume that your total sale for the year was 160,000. What is your implicit cost, what is the accounting profit? what is your economic profit?

Characteristics of the 30-year fixed rate mortgage to the borrow are the following: Check all that apply.   A.Interest rate that adjusts if rates go down.   B.Has a balloon payment due at the end of the loan.   C.Monthly payment is the same every month for the life of the loan.   D. Monthly payments adjust over time..   E.Interest rate that stays the same for the life of the loan..   F. Lower monthly payments because the full amount is spread out over a long period of time.   G. Fully amortizing.

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