finance mcq with solution A + ANSWER

Question
1
1.

If you put
$700 in a savings account with a 10% nominal rate of interest compounded
monthly, what will the investment be worth in 21 months (round to the nearest
dollar)?
Answer

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a.

$827

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b.

$770

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c.

$1,176

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d.

$833

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e.

$828

1 points
Question
2
1.

The ABC Company is
considering a new project which will require an initial cash investment of
$13,201. The projected cash flows for years 1 through 4 are $6,710,
$9,146, $8,952, and $4,886, respectively. If the appropriate discount rate is
3%, compute the NPV of the project.
Enter your answer rounded off
to two decimal points. Do not enter $ in the answer box.
Answer.png”>
1 points
Question
3
1.

Consider a 10-year loan with monthly payments at 10%. If the loan
amount is $250,000, compute the Interest paid during the 6th year.
Enter your answer rounded off to two decimal points. Do not enter
$ in the answer box.
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1 points
Question
4
1.

Today, you
are purchasing a $2,507 7-year car loan at 5 percent. You will pay annually at
the end of each year. What is the amount of each payment?
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1 points
Question
5
1.

027:Say,
you deposit $2,338 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 % compounded monthly for first
7 years and interest of 7 % 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
6
1.

How many
years it will take to grow your money from $4,569 to $6,111 if you can earn an
interest of 8% 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
7
1.

023A:If you
can double your money in 17 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
8
1.

If you receive $284 at the end of each year for the first three
years and $584 at the end of each year for the next three years. What is the
present value? Assume interest rate is 7%.
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
9
1.

If the
effective rate is 11%. 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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1 points
Question
10
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
11
1.

How many
years it will take you to quadruple (means 4 times) your money if you can earn
10.55% 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
12
1.

How much do
you need to invest today in order to have $1,439 at the end of 16 years if you
are sure to earn an interest at the rate of 12%, 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
13
1.

Barrett Pharmaceuticals is considering a drug project that costs
$199,308 today and is expected to generate end-of-year annual cash flows of
$14,964, 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
Question
14
1.

How many
years it will take to grow your money from $4,510 to $9,085 if you can earn an
interest of 7% 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
15
1.

Assume interest rate of 4%. Suppose that you receive
$115,214 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
16
1.

The ABC Company is
considering a new project which will require an initial cash investment of
$5,723. The project will produce no cash flows for the first 5 years. The
projected cash flows for years 6 through 9 are $2,456, $4,090,
$6,718, and $3,663, respectively. If the appropriate discount rate is 3%, 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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1 points
Question
17
1.

The Perpetual Life Insurance Co is trying to sell you an
investment policy that will pay you and your heirs $13,124 per year forever.
Suppose the Perpetual Life Insurance Co. told you the policy costs $192,923. 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
18
1.

How many
months it will take to grow your money from $4,074 to $6,702 if you can earn an
interest of 8% 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
19
1.

If you can
triple your money in 23 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
Question
20
1.

What is the
future value of quarterly payments of $674 for 18 years at 7 percent?
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1 points
Question
21
1.

Kelly
starting setting aside funds 10 years ago to buy some new equipment for her
firm. She has saved $4,143 each quarter and earned an average rate of return of
7 percent. How much money does she currently have saved for this purpose?
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1 points
Question
22
1.

How much do
you need to invest today in order to have $14,116 at the end of 20 years if you
are sure to earn an interest at the rate of 14%? Note: Do not put $ sign in
your answer. Simply write the number in the answer box.
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1 points
Question
23
1.

Assume interest rate of 8%. A
company receives cash flows of $854 at the end of year 5, $273 at the end of
year 7, and $503 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.

What is the
future value of $149 invested for 8 years at 10% 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
25
1.

If you can
double your money in 29 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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1 points
Question
26
1.

What is the
future value of $13,948 for 13 years at 5 percent if interest is compounded
semi-annually? Note: Do not enter “$” in your answer. Simply write
down the number that you get as your answer.
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1 points
Question
27
1.

How many
years it will take you to double your money if you can earn 14% 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
28
1.

Gertrude Carter and Co. has an outstanding loan that calls for
equal annual payments of $14,903 over the 10-year life of the loan. The
original loan amount was $100,000 at an APR of 8 percent.How much of the third payment
is interest?
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
29
1.

What is the
effective rate of 19% 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
30
1.

What is the
future value of annual payments of $1,775 for 13 years at 5 percent?
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1 points
Question
31
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
32
1.

What is the
future value of $2,414 invested for 10 years at 17% 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
33
1.

What should you be willing to
pay in order to receive $975 annually forever, if you require 9% 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
34
1.

How much do
you need to invest today in order to have $683 at the end of 23 years if you
are sure to earn an interest at the rate of 8%, 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
35
1.

Assume interest rate of 9%. A company receives cash flows of
$97,052 at the end of years 4, 5, 6, 7, and 8, and cash flows of $229,073 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
36
1.

026:Say,
you deposit $3,302 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 5 % for first 7 years and
interest of 7 % for the remaining years? Note: Do not put $ sign in your
answer. Simply write the number in the answer box.
Answer.png”>
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