Steve and his wife Christine recently opened an investment

Steve and his wife Christine recently opened an investment

Subject: Business    / Finance   
Question

1.Steve and his wife Christine recently opened an investment account with the intention of saving enough to purchase a house. Their goal is to have $45,000 for a down payment in 5 years. Their account will guarantee them a return of 8% compounded annually. How much do they need to put into the account right now to reach their goal?(Points : 0.42)
$30,626.24.

$39,546.09.

$46,778.96.

$51,214.75.

 

Question 2. 2.Jordan invested $12,500 to help her friend Dylan start his own cooking school five years ago. The business proved to be successful far beyond Dylan’s expectations. Today he is returning a check to Jordan and has told her that as best as he could figure, she was receiving the equivalent of about 38% per year for her initial investment. What is the amount of the check Dylan has for Jordan today?(Points : 0.42)
$44,632.49.
$56,733.57.
$62,561.25.
$66,980.35.

Question 3. 3.Colleen’s grandfather set up a savings account for her with a $25,000 gift when she was first born. The account accumulated interest annually at a rate of 6% per year and no other deposits were made to the account. Colleen is 21 years old today. To date, how much has accumulated in Colleen’s account?(Points : 0.42)
$79,231.88.
$84,989.09.
$98,656.75.
$101,378.92.

Question 4. 4.

Alberto saved enough tip money from working at the casino to place $125,500 in an investment account generating 9.25% compounded monthly. He wants to collect a monthly income of $1,350, at the beginning of each month, for as long as the money lasts. Approximately, how many months will Alberto have this income coming to him?
(Points : 0.42)
139.
145.
152
162.

Question 5. 5.David purchased stock 15 years ago for $325.75. He sold the stock today for $2,500. Given this information, what is the average annual compound rate of return that David realized on this stock?(Points : 0.42)
10.09%.
12.39%.
13.12%.
14.55%.

Question 6. 6.Donna plans to save for a vacation to Costa Rica in 18 months. She will be putting the money into a short-term investment account earning 4% annually. How much will Donna have to put away at the beginning of each month if the total package cost for the trip is $3,500?(Points : 0.42)
$170.34.
$188.37.
$212.69.
$246.73.

Question 7. 7.Danny buys a house for $500,000, putting 20% down. His loan is for 30 years at 6% and he includes closing costs of 3% into his mortgage. How much is his monthly payment (rounded to whole dollars)?(Points : 0.42)
$2,457.
$2,470
$2,754.
$2,785.

Question 8. 8.An annuity is a recurring cash flow (of an equal amount) that occurs at periodic regular intervals. An ordinary annuity occurs when the time of the first payment is at the end of a period. An annuity due occurs when the timing of the first payment is at beginning of the period.
(Points : 0.42)
True
False

Question 9. 9.The future value of an ordinary annuity is the value of equal periodic payments or deposits, at some point in the future. This calculation is useful to determine the value of saving contributions made over time at the end of a period and earning a constant compounded rate of return. (Points : 0.42)
True
False

Question 10.10.NPV measures the excess or shortfall of cash flows based on the discounted present value of the future cash flows (less the initial cost or investment). The interest rate used in the calculation is the investor’s required rate of return for similar investments or projects. This calculation is used in capital budgeting by managers and investors that are evaluating investment alternatives. (Points : 0.38)
True
False