Question 1

How much should be set aside each month to accumulate $10 000 at the end of year 3 under 12% annual interest rate compounded monthly?

Accepted Answer

A) $222.14 
B) $232.14 
C) $242.14 
D) $252.14 
E) $277.78 
A) $222.14 
B) $232.14 
C) $242.14 
D) $252.14 
E) $277.78

Question 2

The maintenance costs of a car are approximately $400 per year. With age the costs increase by $100 a year. What is the future worth of the maintenance costs in five years' time if the interest rate is 5% compounded annually?

Accepted Answer

The maintenance costs are an arithmetic

Question 3

The compound amount factor produces

Accepted Answer

A) the present amount, P, that is equivalent to a future amount, F. 
B) the future amount, F, that is equivalent to a present amount, P. 
C) the annuity, A, that is equivalent to a future amount, F. 
D) the annuity, A, that is equivalent to a present amount, P. 
E) the future amount of arithmetic gradient series. 
A) the present amount, P, that is equivalent to a future amount, F. 
B) the future amount, F, that is equivalent to a present amount, P. 
C) the annuity, A, that is equivalent to a future amount, F. 
D) the annuity, A, that is equivalent to a present amount, P. 
E) the future amount of arithmetic gradient series.

Question 4

In this question, you are to write down the conversion factors that are required to transform the solid arrows into the equivalent dotted arrow. You can either indicate your answer by marking labelled arrows on the diagram, or by writing down a formula, as in the example given below:

Accepted Answer

P = G(A/G,i,6)(P/A,i,6)(We con

Question 5

It is expected that a company is going to invest $8 million in a project. It is also expected that the annual revenue from this project will be $2 million dollars. How long would it take for the company to recover its investment under a 20% interest rate? Under 10%?

Accepted Answer

It is possible to set up the following e

Question 6

You are offered a series of monthly payments of $10, continuing forever. If you deposit these at a nominal interest rate of 12%, compounded monthly, what is the present worth of the series?

Accepted Answer

A) $120 
B) $1000 
C) $1200 
D) $1500 
E) infinite 
A) $120 
B) $1000 
C) $1200 
D) $1500 
E) infinite

Question 7

A person deposits $100 to his savings account biweekly. The savings account pays a nominal interest rate of 5% per year, compounded every six months. What is the effective interest rate for a 6-month period?

Accepted Answer

A) 2.1% 
B) 2.5% 
C) 3.2% 
D) 4.2% 
E) 5.1% 
A) 2.1% 
B) 2.5% 
C) 3.2% 
D) 4.2% 
E) 5.1%

Question 8

A factor that relates a single cash flow in one period to another single cash flow in a later period is

Accepted Answer

A) the uniform series compound amount factor. 
B) the capital recovery factor. 
C) the sinking fund factor. 
D) the annuity conversion factor. 
E) the compound amount factor. 
A) the uniform series compound amount factor. 
B) the capital recovery factor. 
C) the sinking fund factor. 
D) the annuity conversion factor. 
E) the compound amount factor.

Question 9

A wholesale company has decided to build a new warehouse 3 years from now. It must accumulate $600 000 by the end of the 3-year period by putting aside an equal amount from its revenue at the end of each year. If the annual interest rate is 9%, how much the company should put aside each year?

Accepted Answer

The problem requires calculation of the

Question 10

It is known that a bridge costs $10 million to build, and it will be in operation forever. In order to recover initial investment, what should the annual revenue be in this case under 10% interest rate?

Accepted Answer

$10 million is the capitalized

Question 11

Every leap year you get a bonus of $20 000, which you put into a retirement account at 5% interest. If your first payment into the account is made in four years time, and you put no other money into the account, how long will it be before you can retire with a million dollars?

Accepted Answer

A) 36 
B) 40 
C) 44 
D) 48 
E) 52 
A) 36 
B) 40 
C) 44 
D) 48 
E) 52

Question 12

The present worth factor

Accepted Answer

A) converts an annuity into the equivalent present amount. 
B) gives the future value equivalent to a series of equal payments. 
C) converts a series of repeated equal payments into the equivalent future amount. 
D) gives the present amount that is equivalent to some future amount. 
E) gives the future amount that is equivalent to a present amount. 
A) converts an annuity into the equivalent present amount. 
B) gives the future value equivalent to a series of equal payments. 
C) converts a series of repeated equal payments into the equivalent future amount. 
D) gives the present amount that is equivalent to some future amount. 
E) gives the future amount that is equivalent to a present amount.

Question 13

An arithmetic gradient series

Accepted Answer

A) starts at zero at the end of the first period and then increases by a constant amount each period. 
B) starts at zero at the beginning of the first period and then increases by a constant amount each period. 
C) starts at zero at the end of the second period and then increases by a constant amount each period. 
D) starts at zero at the beginning of the second period and then increases by a constant amount each period. 
E) starts at zero at the end of the first period and then increases by an increasing amount each period. 
A) starts at zero at the end of the first period and then increases by a constant amount each period. 
B) starts at zero at the beginning of the first period and then increases by a constant amount each period. 
C) starts at zero at the end of the second period and then increases by a constant amount each period. 
D) starts at zero at the beginning of the second period and then increases by a constant amount each period. 
E) starts at zero at the end of the first period and then increases by an increasing amount each period.

Question 14

John wants to buy a laptop computer in one year. He is working part time earning $600 per month. The computer John wants to buy costs $2 000. He decides to invest money in securities that pay a monthly rate of 2%. How much should John put aside every month to accumulate the required amount?

Accepted Answer

The following equati

Question 15

Explain why the growth-adjusted interest rate in the geometric gradient series to present worth conversion factor is less than the original interest rate when the growth factor is positive.

Accepted Answer

The interest rate reduces the

Question 16

In this question, you are to write down the conversion factors that are required to transform the solid arrows into the equivalent dotted arrow. You can either indicate your answer by marking labelled arrows on the diagram, or by writing down a formula, as in the example given below:

Accepted Answer

The answer of In this question, you are to write...

Question 17

You want to have a million dollars in the bank when you retire. You think you can save $5 000 this year, and increase that by 2% every subsequent year, in a bank that offers you 5% interest. If you make your first deposit in a year's time, how many years will it be from now before you can retire?

Accepted Answer

A) 41 
B) 42 
C) 43 
D) 44 
E) 45 
A) 41 
B) 42 
C) 43 
D) 44 
E) 45

Question 18

Stan saved $1 000 working part-time at a store. He wants to use this money for a trip to Europe. He is a smart guy and therefore decides to invest the money into an investment fund with a 24% annual interest rate compounded monthly. The trip to Europe costs $2 500. How long (in months)should Stan keep his money in the investment fund to accumulate the required amount?

Accepted Answer

The problem can be represented by the eq

Question 19

Suppose that you have a series of payments: $100 in year 1, $150 in year 2 and $200 in year 3. If annual interest rate is 10%, what is the equivalent annuity for this series?

Accepted Answer

A) $150.00 
B) $146.82 
C) $142.33 
D) $140.11 
E) $135.68 
A) $150.00 
B) $146.82 
C) $142.33 
D) $140.11 
E) $135.68

Question 20

Suppose that your salary will increase by 2% per year over the next 4 years. If annual interest rate is also 2% over this period, what is the geometric series to present worth conversion factor in this case?

Accepted Answer

A) 4.08 
B) 4.00 
C) 3.92 
D) 3.56 
E) 3.22 
A) 4.08 
B) 4.00 
C) 3.92 
D) 3.56 
E) 3.22

How much should be set aside each month to accumulate $10 000 at the end of year 3 under 12% annual interest rate compounded monthly?

The maintenance costs of a car are approximately $400 per year. With age the costs increase by $100 a year. What is the future worth of the maintenance costs in five years' time if the interest rate is 5% compounded annually?

The compound amount factor produces

In this question, you are to write down the conversion factors that are required to transform the solid arrows into the equivalent dotted arrow. You can either indicate your answer by marking labelled arrows on the diagram, or by writing down a formula, as in the example given below:

It is expected that a company is going to invest $8 million in a project. It is also expected that the annual revenue from this project will be $2 million dollars. How long would it take for the company to recover its investment under a 20% interest rate? Under 10%?

You are offered a series of monthly payments of $10, continuing forever. If you deposit these at a nominal interest rate of 12%, compounded monthly, what is the present worth of the series?

A person deposits $100 to his savings account biweekly. The savings account pays a nominal interest rate of 5% per year, compounded every six months. What is the effective interest rate for a 6-month period?

A factor that relates a single cash flow in one period to another single cash flow in a later period is

A wholesale company has decided to build a new warehouse 3 years from now. It must accumulate $600 000 by the end of the 3-year period by putting aside an equal amount from its revenue at the end of each year. If the annual interest rate is 9%, how much the company should put aside each year?

It is known that a bridge costs $10 million to build, and it will be in operation forever. In order to recover initial investment, what should the annual revenue be in this case under 10% interest rate?

Every leap year you get a bonus of $20 000, which you put into a retirement account at 5% interest. If your first payment into the account is made in four years time, and you put no other money into the account, how long will it be before you can retire with a million dollars?

The present worth factor

An arithmetic gradient series

John wants to buy a laptop computer in one year. He is working part time earning $600 per month. The computer John wants to buy costs $2 000. He decides to invest money in securities that pay a monthly rate of 2%. How much should John put aside every month to accumulate the required amount?

Explain why the growth-adjusted interest rate in the geometric gradient series to present worth conversion factor is less than the original interest rate when the growth factor is positive.

In this question, you are to write down the conversion factors that are required to transform the solid arrows into the equivalent dotted arrow. You can either indicate your answer by marking labelled arrows on the diagram, or by writing down a formula, as in the example given below:

You want to have a million dollars in the bank when you retire. You think you can save $5 000 this year, and increase that by 2% every subsequent year, in a bank that offers you 5% interest. If you make your first deposit in a year's time, how many years will it be from now before you can retire?

Suppose that you have a series of payments: $100 in year 1, $150 in year 2 and $200 in year 3. If annual interest rate is 10%, what is the equivalent annuity for this series?

Suppose that your salary will increase by 2% per year over the next 4 years. If annual interest rate is also 2% over this period, what is the geometric series to present worth conversion factor in this case?

Engineering Decision Making

Time Value of Money

Comparison Methods: Part I

Comparison Methods: Part Ii

Financial Accounting and Business Plans

Replacement Decisions

Taxes

Inflation

Public Sector Decision Making

Project Management

Dealing With Uncertainty and Risk

Filters

Exam 3: Cash Flow Analysis

How much should be set aside each month to accumulate $10 000 at the end of year 3 under 12% annual interest rate compounded monthly?

The maintenance costs of a car are approximately $400 per year. With age the costs increase by $100 a year. What is the future worth of the maintenance costs in five years' time if the interest rate is 5% compounded annually?

The compound amount factor produces

In this question, you are to write down the conversion factors that are required to transform the solid arrows into the equivalent dotted arrow. You can either indicate your answer by marking labelled arrows on the diagram, or by writing down a formula, as in the example given below:

It is expected that a company is going to invest $8 million in a project. It is also expected that the annual revenue from this project will be $2 million dollars. How long would it take for the company to recover its investment under a 20% interest rate? Under 10%?

You are offered a series of monthly payments of $10, continuing forever. If you deposit these at a nominal interest rate of 12%, compounded monthly, what is the present worth of the series?

A person deposits $100 to his savings account biweekly. The savings account pays a nominal interest rate of 5% per year, compounded every six months. What is the effective interest rate for a 6-month period?

A factor that relates a single cash flow in one period to another single cash flow in a later period is

A wholesale company has decided to build a new warehouse 3 years from now. It must accumulate $600 000 by the end of the 3-year period by putting aside an equal amount from its revenue at the end of each year. If the annual interest rate is 9%, how much the company should put aside each year?

It is known that a bridge costs $10 million to build, and it will be in operation forever. In order to recover initial investment, what should the annual revenue be in this case under 10% interest rate?

Every leap year you get a bonus of $20 000, which you put into a retirement account at 5% interest. If your first payment into the account is made in four years time, and you put no other money into the account, how long will it be before you can retire with a million dollars?

The present worth factor

An arithmetic gradient series

John wants to buy a laptop computer in one year. He is working part time earning $600 per month. The computer John wants to buy costs $2 000. He decides to invest money in securities that pay a monthly rate of 2%. How much should John put aside every month to accumulate the required amount?

Explain why the growth-adjusted interest rate in the geometric gradient series to present worth conversion factor is less than the original interest rate when the growth factor is positive.

In this question, you are to write down the conversion factors that are required to transform the solid arrows into the equivalent dotted arrow. You can either indicate your answer by marking labelled arrows on the diagram, or by writing down a formula, as in the example given below:

You want to have a million dollars in the bank when you retire. You think you can save $5 000 this year, and increase that by 2% every subsequent year, in a bank that offers you 5% interest. If you make your first deposit in a year's time, how many years will it be from now before you can retire?

Suppose that you have a series of payments: $100 in year 1, $150 in year 2 and $200 in year 3. If annual interest rate is 10%, what is the equivalent annuity for this series?

Suppose that your salary will increase by 2% per year over the next 4 years. If annual interest rate is also 2% over this period, what is the geometric series to present worth conversion factor in this case?

Engineering Decision Making

Time Value of Money

Comparison Methods: Part I

Comparison Methods: Part Ii

Financial Accounting and Business Plans

Replacement Decisions

Taxes

Inflation

Public Sector Decision Making

Project Management

Dealing With Uncertainty and Risk

Filters