Finance Course Test with Answers

academic year interest rate of 3.76 percent would pay a 5,032 dollars interest over 10 years,

Beverly and Kyle Nelson currently insure their cars with separate companies paying $450 and $375 a year. If they insure both cars with the same company, they would save 10 percent on the annual premiums. What would be the future value of the annual savings over ten years based on an annual interest rate of 6 percent?

II.|Connie has an investment portfolio in excess of $450,000. She pays Chris $350 to do an analysis of her investments and make recommendations on restructuring the portfolio.|

7. Trevor's Tires is offering a set of 4 premium tires on sale for $550. The credit terms are 24 months at $20 per month. What is the interest rate on this offer?

For an individual who pays personal income taxes at a rate of 30 percent, which of the following statements is most correct?

The difference between the present value of an investment?s future cash flows and its initial cost is the:

If the present is Year 0 and rates compound annually, in what year does the first outlay of $45,000 occur? Hint, you’re using the perpetuity approach to valuation.

8. If you want to purchase a home. You have $15,000 to put down. All you can afford is $1,500.00 per month and you do not want to finance for more than 15 years @ 6% interest, (your taxes will be $85.00 per month and insurance $200.00 a month), what is the amount you can pay for your home? (Show all your work)

10. You have $2,000 today and want to quadruple your money in 10 years. What interest rate must you earn?

A person deposited $500 in a savings account that pays 5% annual interest that is compounded yearly. At the end of 10 years, how much money will be in the savings account? (Bluman, A. G. 2005, page 230).

The break even values for a profit model are the values for which you earn $0 in profit. Use the equation you created in question one to solve P = 0, and find your break even values.

Rose paid 8% interest on a $12,500 loan balance. Lily paid $5,000 interest on a $62,500 loan. Based on one year:

11. A 65-year-old wishes to convert the cash value of his insurance policy into an annuity. He can select an annuity that will last 15 years or one that lasts 20 years. If the cash value is $450,000 and interest rates are 5.25%, how much less per year will he receive if he chooses the 20-year annuity?

h. Calculate the rooms sold, occupancy %, and sales dollars he will need to break even if he opens the gift shop.

3. Assume that cost of goods sold for a company consists only of variable costs and gross margin is = (revenue – cost of goods sold)/revenue. Which of the following is true