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Assignment Unit03
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Submitted Feb 23 at 5:06pm
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Question 1
0 / 1 pts
There are 3 questions in this group. For convenience the information is repeated for each question. Mary saves $200 in a savings account
with an annual interest rate of 12%. If the interest rate is a simple interest without compounding, how much will she have at the end of 3
years?
Correct Answer
Less than $275.00 Between $275.00 and $285.00 Between $285.01 and $295.00 Between $295.01 and $305.00 More than $305.00 Answer: FV=200+ (200*12%)*3=200+72=272.00
Unanswered
Question 2
0 / 1 pts
Mary saves $200 in a savings account with an annual interest rate of 12%. If the interest rate is a compounded interest with annual
 Edit   compounding, how much will she have at the end of 3 years?
Less than $275.00 Correct Answer
Between $275.00 and $285.00 Between $285.01 and $295.00 Between $295.01 and $305.00 More than $305.00 Answer: FV=200*(1+12%)^3=200*1.404928=280.99
Unanswered
Question 3
0 / 1 pts
Mary saves $200 in a savings account with an annual interest rate of 12%. If the interest rate is a compounded interest with monthly
compounding, how much will she have at the end of 3 years?
Less than $270.00 Between $270.00 and $280.00 Correct Answer
Between $280.01 and $290.00 Between $290.01 and $300.00 More than $300.00 Answer: FV=200*(1+12%/12)^ (3*12)=200*1.430769=286.15
Unanswered
Question 4
0 / 1 pts
There are 2 questions in this group. For convenience the information is repeated for each question. If Jack invests $1,000 at the end of
every month (EOM) for seven years in an investment paying an annual rate of 10% compounded monthly, how much will he have at the end
of seven years?
Less than $120,945.00 Correct Answer
Between $120,945.00 and $120,955.00 Between $120,955.01 and $120,965.00 Between $120,965.01 and $120,975.00 More than $120,975.00 Answer: FV=1000 * FVFS (EOM, monthly r=10%/12, n=84)=1000 * 120.950418 =120,950.42
Question 5
0 / 1 pts
Unanswered
If Jack invests $1,000 at the beginning of every month (BOM) for seven years in an investment paying an annual rate of 10% compounded
monthly, how much will he have at the end of seven years?
Less than $121,940.00 Between $121,940.00 and $121,950.00 Correct Answer
Between $121,950.01 and $121,960.00 Between $121,960.01 and $121,970.00 More than $121,970.00 Answer: FV = 1000 * FVFS (BOM, monthly r=10%/12, n=84)=1000 * 121.956430=121,956.43
Unanswered
Question 6
0 / 1 pts
Using Beginning of the Month (BOM) computation method, what is the future value factor sum (FVFS) if annual interest rate is 8% with
monthly compounding, and the number of period is 24 months?
Less than 25.95 Between 25.95 and 26.05 Correct Answer
Between 26.06 and 26.15 More than 26.15 Answer: FVFS(r=8%/12, n=24, BOM)=((1+8%/12)^(24+1)­1)/(8%/12) ­1 =((1+0.006667)^25­1)/0.006667­1=(1.180707­
1)/0.006667­1=27.104693­1=26.104693
Unanswered
Question 7
0 / 1 pts
Using End of the Month (EOM) computation method, what is the future value factor sum (FVFS) if annual interest rate is 8% with monthly
compounding, and the number of period is 24 months?
Less than 25.75 Between 25.75 and 25.85 Correct Answer
Between 25.86 and 25.95 More than 25.95 Answer: FVFS(r=8%/12, n=24, EOM)=((1+8%/12)^24­1)/(8%/12) =((1+0.006667)^24­1)/0.006667=(1.172897­
1)/0.006667=25.93329
Unanswered
Question 8
0 / 1 pts
Using Beginning of the Month (BOM) computation method, what is the future value factor sum (FVFS) if annual interest rate is 12% with
monthly compounding, and the number of period is 48 months?
Less than 61.55 Between 61.55 and 61.65 Between 61.66 and 61.75 Correct Answer
More than 61.75 Answer: FVFS(r=12%/12, n=48, BOM)=((1+12%/12)^(48+1)­1)/(12%/12) ­1 =((1+0.01)^49­1)/0.01­1=(1.628348­1)/0.01­
1=62.834834­1=61.834834
Unanswered
Question 9
0 / 1 pts
Using End of the Month (EOM) computation method, what is the future value factor sum (FVFS) if annual interest rate is 12% with monthly
compounding, and the number of period is 48 months?
Less than 61.15 Correct Answer
Between 61.15 and 61.25 Between 61.26 and 61.35 More than 61.35 Answer: FVFS(r=12%/12, n=48, EOM)=((1+12%/12)^48­1)/(12%/12) =((1+0.01)^48­1)/0.01=(1.61222608­
1)/0.01=61.222608
Unanswered
Question 10
0 / 1 pts
Using Beginning of the Month (BOM) computation method, what is the future value factor sum (FVFS) if annual interest rate is 6% with
monthly compounding, and the number of period is 36 months?
Less than 39.15 Between 39.15 and 39.25 Between 39.26 and 39.35 Correct Answer
More than 39.35 Answer: FVFS(r=6%/12, n=36, BOM)=((1+6%/12)^(36+1)­1)/(6%/12) ­1 =((1+0.005)^37­1)/0.005­1=(1.202664­1)/0.005­
1=39.532785
Unanswered
Question 11
0 / 1 pts
Using End of the Month (EOM) computation method, what is the future value factor sum (FVFS) if annual interest rate is 6% with monthly
compounding, and the number of period is 36 months?
Less than 39.15 Between 39.15 and 39.25 Correct Answer
Between 39.26 and 39.35 More than 39.35 Answer: FVFS(r=6%/12, n=36, EOM)=((1+6%/12)^36­1)/(6%/12) =((1+0.005)^36­1)/0.005=(1.1966805­
1)/0.005=39.336105
Unanswered
Question 12
0 / 1 pts
Using Beginning of the Month (BOM) computation method, what is the future value factor sum (FVFS) if annual interest rate is 4% with
monthly compounding, and the number of period is 36 months?
Less than 38.15 Between 38.15 and 38.25 Correct Answer
Between 38.26 and 38.35 More than 38.35 Answer: FVFS(r=4%/12, n=36, BOM)=((1+4%/12)^(36+1)­1)/(4%/12) ­1 =((1+0.003333)^37­1)/0.003333­1=(1.1310294­
1)/0.003333­1=38.308834
Unanswered
Question 13
0 / 1 pts
Using End of the Month (EOM) computation method, what is the future value factor sum (FVFS) if annual interest rate is 4% with monthly
compounding, and the number of period is 36 months?
Less than 38.15 Correct Answer
Between 38.15 and 38.25 Between 38.26 and 38.35 More than 38.35 Answer: FVFS(r=4%/12, n=36, EOM)=((1+4%/12)^36­1)/(4%/12) =((1+0.003333)^36­1)/0.003333=(1.1272719­
1)/0.003333=38.181562
Unanswered
Question 14
0 / 1 pts
There are 3 questions in this group. For convenience the information is repeated for each question. Henry saves $600 on the first day of
each month (BOM) for 6 months at an annual interest rate of 10% compounded monthly. How much will Henry have at the end of the 6
months?
Less than $3690.00 Between $3690.00 and $3700.00 Correct Answer
Between $3700.01 and $3710.00 Between $3710.01 and $3720.00 More than $3720.00 Answer: FV=600*FVFS (BOM, r=10%/12, n=6)=600*6.177451=3706.47
Unanswered
Question 15
0 / 1 pts
Henry saves $600 on the first day of each month (BOM) for 6 months at an annual interest rate of 10% compounded monthly. If Henry
leaves the money there for another 6 months without further deposits, how much money will Henry have at the end?
Correct Answer
Less than $3900.00 Between $3900.00 and $3910.00 Between $3910.01 and $3920.00 Between $3920.01 and $3930.00 More than $3930.00 Answer: Here you treat this as a periodical investment for six months that generates $3706.47 at the end of the sixth
month (see previous problem). Then you treat the $3706.47 as a one­time investment for another six months.
FV=600*FVFS(BOM, r=10%/12, n=6)*(1+r)^6 =600*6.177451*(1+10%/12)^6 =3895.70
Unanswered
Question 16
0 / 1 pts
Henry saves $600 on the first day of each month (BOM) for 6 months in an account at an annual interest rate of 10% compounded monthly.
Then Henry decides to reduce his deposit to only $300 a month for the next 6 months to the same account. How much money will Henry
have in this account at the end?
Less than $5745.00 Correct Answer
Between $5745.00 and $5755.00 Between $5755.01 and $5765.00 Between $5765.01 and $5775.00 More than $5775.00 Answer: You treat this as two investments. The first investment is the $600 a month for six months and then let it sit
there. That will generate $3895.70 at the end. The second investment is $300 for six months. The total is just the sum of
these two. FV=600*FVFS (BOM, r=10%/12, n=6)*(1+r)^6+300* FVFS(BOM, r=10%/12, n=6) =600*6.177451*
(1+10%/12)^6+300* 6.177451=3895.70+1853.24=5748.94
Unanswered
Question 17
0 / 1 pts
Mary is planning on saving some money to buy a laptop. Her goal is to have $1000 saved after one year. If she decides to put an equal
amount of money in a bank savings account every month on the first day (BOM), and the annual interest rate is 6% compounded monthly,
how much should she save every month?
Correct Answer
Less than $82.00 Between $82.00 and $83.00 Between $83.01 and $84.00 Between $84.01 and $85.00 More than $85.00 Answer: This is an application of FVFS, M * FVFS (rm = 0.5%, n=12, BOM) = 1,000 M= 1,000 / FVFS (rm=0.5%, n=12,
BOM)=1,000 / {((1+0.5%)^(12+1)­1)/0.5%]­1}= 1,000 / 12.397240=80.66
Unanswered
Question 18
0 / 1 pts
Jim invests $2000 at the beginning of each year (BOM) for 3 years in an investment paying an annual interest rate of 8%, compounded
annually. How much will he have at the end of 3 years?
Less than $7010.00 Correct Answer
Between $7010.00 and $7020.00 Between $7020.01 and $7030.00 More than $7030.00 Answer: FV=2000*FVFS(r=8%, n=3, BOM)=2000*3.506112=7012.22
Unanswered
Question 19
0 / 1 pts
Helen wants to have 1 million dollars when she retires in 20 years. How much must she save at the end of each month (EOM) if she can
earn 6%, monthly compounding?
Less than $2160.00 Correct Answer
Between $2160.00 and $2170.00 Between $2170.01 and $2180.00 More than $2180.00 Answer: M= 1,000,000 / FVFS (r=6%/12, n=240, EOM)= 1,000,000 /462.040895 =2164.31
Unanswered
Question 20
0 / 1 pts
Mary also wants to save 1 million dollars when she retires but she starts early so she has 30 years to reach that goal. How much must she
save at the end of each month (EOM) if she can earn 6%, monthly compounding?
Correct Answer
Less than $1000.00 Between $1000.00 and $1010.00 Between $1010.01 and $1020.00 More than $1020.00 Answer: M= 1,000,000 / FVFS (rm=6%/12, n=360, EOM) =1,000,000/1004.515042 =995.51
Unanswered
Question 21
0 / 1 pts
Sandra also wants to save 1 million dollars when she retires but she starts even earlier so she has 40 years to reach that goal. How much
must she save at the end of each month (EOM) if she can earn 6%, monthly compounding?
Less than $485.00 Between $485.00 and $495.00 Correct Answer
Between $495.01 and $505.00 More than $505.00 Answer: M= 1,000,000 / FVFS (rm=6%/12, n=480, EOM)=1,000,000 /1991.490734=502.14.
Unanswered
Question 22
0 / 1 pts
Future value is
Correct Answer
the accumulated amount of your investment fund. the original invested amount. the interest rate for certain period. the number of periods. Unanswered
Question 23
0 / 1 pts
Which of the following interest computation method will generate the largest future value for a given investment amount and interest rate?
simple interest annual compounding monthly compounding daily compounding Correct Answer
Unanswered
Question 24
0 / 1 pts
Which of the following scenarios describes the most appropriate application of Future Value Factor Sum (FVFS)?
Figuring out how much money one will have after a year with $1000 one time investment. Figuring out equal monthly saving amount to achieve the goal of having $2000 at the end of the year Correct Answer
Figuring out how much a difference different compounding methods would make for investing $2000 for a year. Unanswered
Question 25
0 / 1 pts
In order to compute the future value, one needs to know
the original invested amount. the interest rate for the period. the number of periods. all of the above. Correct Answer
Unanswered
Question 26
0 / 1 pts
If one invests $100 per month at an annual interest rate of 6% for a year, monthly compounding, the ending balance (future value) is likely
to be
less than $1,200 equals to $1,200 Correct Answer
greater than $1,200 Unanswered
Question 27
0 / 1 pts
The BOM FVFS formula is an easy way to compute which of the follow computation, where r is the interest rate and n is the number of
periods?
(1+r)0+(1+r)1+ …+ (1+r)n­1
Correct Answer
(1+r)1+(1+r)2+ …+ (1+r)n
1/(1+r)0+1/(1+r)1+ …+ 1/(1+r)n­1
1/(1+r)1+1/(1+r)2+ …+ 1/(1+r)n
Unanswered
Question 28
0 / 1 pts
The EOM FVFS formula is an easy way to compute which of the follow computation, where r is the interest rate and n is the number of
periods?
Correct Answer
(1+r)0+(1+r)1+ …+ (1+r)n­1
(1+r)1+(1+r)2+ …+ (1+r)n
1/(1+r)0+1/(1+r)1+ …+ 1/(1+r)n­1
1/(1+r)1+1/(1+r)2+ …+ 1/(1+r)n
Unanswered
Question 29
0 / 1 pts
When FVFS formula is applied in otherwise similar saving situations, the EOM formula will always yield ____ saving amount at the end
compared to the BOM formula.
Correct Answer
a lower a higher the same Unanswered
Question 30
0 / 1 pts
Which of the following scenarios describes the most appropriate application of Future Value Factor (FVF)?
Correct Answer
Figuring out how much money one will have after a year with $1000 one time investment. Figuring out equal monthly saving amount to achieve the goal of having $2000 at the end of the year Figuring out how much a difference different compounding methods would make for investing $2000 for a year. Quiz Score: 0 out of 30