Question

What is the future value of $250 place into a bank account returning 7% nominal rate of return in 6 years?

What is the present value of $2,000 discount at 8% nominal rate of return over 5 years?

What is the future value of five $300 normal annuity payment compounded at 8%?

What is the present value of five $300 normal annuity payments discounted at 6%?

What is the net present value of the following real estate investment discounted at 12%?

Year one - $10,000

Year two - $12,000

Year three - $8,000

Year four - $5,000

Five years ago Widget Inc. yearly dividends were $1.18 and this year their dividends are $2.56. What has been the five year nominal growth of these dividends?

Here is a list of five individual FICO credit scores. What is their average and standard deviation?

671

745

810

778

801

Widget Inc. Stock has the following probabilities of return. What is its mu and sigma?

There is a 30% chance for a good economic outlook and the stock will increase by 25%

There is a 40% chance for an okay economic outlook and the stock will increase by 5%

There is a 30% chance for a bad economic outlook and the stocks will decline by -25%

The following data was obtained on two individual stocks. What is their correlation? What does the number mean?

	Stock A	Stock B
Year 1 return	12%	8%
Year 2 return	7%	16%
Year 3 return	10%	12%

You are purchasing a factory for $120,000 at a nominal rate of 10% and the terms of the agreement are for 20 equal payments to retire the debt. What is the yearly payment

Answer 1

What is the future value of $250 place into a bank account returning 7% nominal rate of return in 6 years?
FV = 250*(1+7%)⁶= 375.18
What is the present value of $2,000 discount at 8% nominal rate of return over 5 years?
PV = 2000/(1+8%)⁵ = 1361.17
What is the future value of five $300 normal annuity payment compounded at 8%?
FV of annuity = 300 * (1+8%)⁵-1)/8% = 1759.98
What is the present value of five $300 normal annuity payments discounted at 6%?
PV of annuity = 300 * (1-(1+8%)^-5)/8% = 1263.71

Only 4 subparts can be answered at a time.

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