Final Quiz – Graded >> Finance for Everyone: Decisions
TOTAL POINTS 10
1.If your $10 investment increases to $11 in 6 months, you would have earned the following annual rate of return:
1 point
2.The present value of future cash flows increases if _________________.
I/ the interest rate decreases
II/ the amounts occur closer to time zero
III/ the compounding frequency increases
IV/ the risk premium increases
1 point
3.You invested $1,000 today at 4%. How much interest was earned in year 5?
2 points
4.Thanks to your new diet, you are eating healthy and saving $10 a day during your 5 workday-week. You decide to set this aside as a future retirement dividend by depositing $50 every Friday in a fund for each of your remaining working years (45 years). Assume you can earn an average return of 10% over this period, what will bethe future value of your investments the day you retire?
2 points
5.Present value the following cash prizes: (1) $150 annually forever or (2) $100 every six months over the next 25 years. The rate of interest is 6% compounded semi-annually.
2 points
6.You borrow $100 from “Jaw Breaker Joe” and promise to repay Joe a total of $105 in one month. What is the effective annual interest rate charged by Joe?
2 points
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