Fina 3332: Exam one Practice
Questions All Solved Correctly 2026-
2027 Updated.
As the discount rate increases, the present value of $500 to be received six years from now: -
Answer decreases.
If you are figuring out how much you will have when you retire given your monthly payment
and an interest rate, you are: - Answer Compounding
Today you made a student loan of $10,000 with the 5.5% annual interest rate. You will be in
school next four years and you do not have any obligation to make payments until you graduate
while the interest accumulates. How much will you owe in four years when you start making
payments? Round to the nearest cent. Do not include any unit (If your answer is $111.11, then
type 111.11 without $ sign.) - Answer 12388.25
You want $1,000,000 when you retire in 40 years. You decided to save some money every year
next 40 years for your retirement. You are going to open Roth IRA and invest everything in
Vanguard S&P 500 Funds that expect to earn 6 percent annually. If your contribution starts a
year from today, how much must you contribute every year next 40 years? Round to the nearest
cent. Do not include any unit (If your answer is $111.11, then type 111.11 without $ sign.) -
Answer 6461.54
You are starting your new career today after graduating from University of Houston. You decided
to contribute $500 a month into a fund that is expected to earn 6 percent, compounded
monthly. If you start the contribution a month from today for 30 years, how much will you have
right after you contribute the last $500 in 30 years? Round to the nearest cent. Do not include
any unit (If your answer is $111.11, then type 111.11 without $ sign.) - Answer 502257.52
You are starting medical school today. Becoming a doctor is your lifetime dream, so you started
saving money when you were little. You now have $200,000 in your account, and you are going
to withdraw annually starting today over the next four years. If you can earn 3 percent interest
on the account, how much a year can you withdraw? Round to the nearest cent. Do not include
any unit (If your answer is $111.11, then type 111.11 without $ sign.) - Answer 52238.26
Toshi's Life Insurance Co. is trying to sell you an investment policy that will pay you and your
heirs $25,000 per year forever. If your required rate of return on this investment is 7%, how
much the most are you willing to pay for the policy? Round to the nearest cent. Do not include
any unit (If your answer is $111.11, then type 111.11 without $ sign.) - Answer 357142.86
, How much are you willing to pay for an investment that promises to pay $10,000 a year in
perpetuity if your required rate of return on this investment is 10 percent and the first $10,000
payment starts in 10 years? Round to the nearest cent. Do not include any unit (If your answer
is $111.11, then type 111.11 without $ sign.) - Answer 42409.76
The government has imposed a fine on the Not-So-Legal Company. The fine calls for annual
payments of $100,000, $250,000, and $250,000, respectively over the next three years. The first
payment is due one year from today. The government plans to invest the funds until the final
payment is collected and then donate the entire amount, including investment earnings, to a
national health center. The government will earn 3.5 percent on the funds held. How much will
the national health center receive three years from today? Round to the nearest cent. Do not
include any unit (If your answer is $111.11, then type 111.11 without $ sign.) - Answer
615872.50
What is the effective annual yield of 6% compounded semi-annually? Answer in the percent
format. Round to the nearest hundredth percent. Do not include any unity (If your answer is
4.36%, then enter 4.36 as your answer without % sign). - Answer 6.09
Which of the following statements is correct?
An annuity due has payments at the beginning of each period continues for fixed period.
An ordinary annuity has payments at the end of each period continues forever.
None of the above.
A perpetuity has inconsistent payments forever. - Answer An annuity due has payments at
the beginning of each period continues for fixed period.
Which of the following is NOT considered in the time value of money?
Inflation
Opportunity Cost
Risk
All of the above are considered. - Answer All of the above are considered.
In regards to Time Value of Money, the Discount Rate can be referred to as:
None of the above
The cost of capital
All of the above
The interest rate
Questions All Solved Correctly 2026-
2027 Updated.
As the discount rate increases, the present value of $500 to be received six years from now: -
Answer decreases.
If you are figuring out how much you will have when you retire given your monthly payment
and an interest rate, you are: - Answer Compounding
Today you made a student loan of $10,000 with the 5.5% annual interest rate. You will be in
school next four years and you do not have any obligation to make payments until you graduate
while the interest accumulates. How much will you owe in four years when you start making
payments? Round to the nearest cent. Do not include any unit (If your answer is $111.11, then
type 111.11 without $ sign.) - Answer 12388.25
You want $1,000,000 when you retire in 40 years. You decided to save some money every year
next 40 years for your retirement. You are going to open Roth IRA and invest everything in
Vanguard S&P 500 Funds that expect to earn 6 percent annually. If your contribution starts a
year from today, how much must you contribute every year next 40 years? Round to the nearest
cent. Do not include any unit (If your answer is $111.11, then type 111.11 without $ sign.) -
Answer 6461.54
You are starting your new career today after graduating from University of Houston. You decided
to contribute $500 a month into a fund that is expected to earn 6 percent, compounded
monthly. If you start the contribution a month from today for 30 years, how much will you have
right after you contribute the last $500 in 30 years? Round to the nearest cent. Do not include
any unit (If your answer is $111.11, then type 111.11 without $ sign.) - Answer 502257.52
You are starting medical school today. Becoming a doctor is your lifetime dream, so you started
saving money when you were little. You now have $200,000 in your account, and you are going
to withdraw annually starting today over the next four years. If you can earn 3 percent interest
on the account, how much a year can you withdraw? Round to the nearest cent. Do not include
any unit (If your answer is $111.11, then type 111.11 without $ sign.) - Answer 52238.26
Toshi's Life Insurance Co. is trying to sell you an investment policy that will pay you and your
heirs $25,000 per year forever. If your required rate of return on this investment is 7%, how
much the most are you willing to pay for the policy? Round to the nearest cent. Do not include
any unit (If your answer is $111.11, then type 111.11 without $ sign.) - Answer 357142.86
, How much are you willing to pay for an investment that promises to pay $10,000 a year in
perpetuity if your required rate of return on this investment is 10 percent and the first $10,000
payment starts in 10 years? Round to the nearest cent. Do not include any unit (If your answer
is $111.11, then type 111.11 without $ sign.) - Answer 42409.76
The government has imposed a fine on the Not-So-Legal Company. The fine calls for annual
payments of $100,000, $250,000, and $250,000, respectively over the next three years. The first
payment is due one year from today. The government plans to invest the funds until the final
payment is collected and then donate the entire amount, including investment earnings, to a
national health center. The government will earn 3.5 percent on the funds held. How much will
the national health center receive three years from today? Round to the nearest cent. Do not
include any unit (If your answer is $111.11, then type 111.11 without $ sign.) - Answer
615872.50
What is the effective annual yield of 6% compounded semi-annually? Answer in the percent
format. Round to the nearest hundredth percent. Do not include any unity (If your answer is
4.36%, then enter 4.36 as your answer without % sign). - Answer 6.09
Which of the following statements is correct?
An annuity due has payments at the beginning of each period continues for fixed period.
An ordinary annuity has payments at the end of each period continues forever.
None of the above.
A perpetuity has inconsistent payments forever. - Answer An annuity due has payments at
the beginning of each period continues for fixed period.
Which of the following is NOT considered in the time value of money?
Inflation
Opportunity Cost
Risk
All of the above are considered. - Answer All of the above are considered.
In regards to Time Value of Money, the Discount Rate can be referred to as:
None of the above
The cost of capital
All of the above
The interest rate
