Quiz 2 BUSI 223 Personal Finance

1.      Michael and Sandy purchased a home for $100,000 five years ago. If its value appreciated at 6% annually, what is it worth today?

2.      __________ is the value today of an amount to be received in the future

3.      I want to have a college fund for my daughter. She is 5, so I have 13 years to achieve my goal of $50,000. The bank says I can earn 2%. I have $5000 already set aside. How much do I need to contribute every year?

4.      I started my career at 30. I want to be able to retire at 58. I do not have any money to put away today, but I can put away $1,000 a month at 5%. How much will I have at retirement?

5.      My student loans total $47,000. I want to see what my monthly payment would be. I have a 3% interest rate and it’s financed over 10 years.

6.      Phil has $2,000, and he needs it to grow to $4,000 in 8 years. Assuming he does not add any more money to this fund, what rate of interest would be he need to earn? Approximate the rate of interest to the nearest whole number

7.      Theresa invested $5,000 in an account she expects will earn 7% annually. Approximately how many years will it take for the account to double in value? (round the number of years to the nearest whole number)

8.      The process of finding present value is called ________

9.      I want to buy a laptop that costs $1,500. I have $1,200 and can earn up to 5%. How many months would it take to get it?

10.   Your investment advisor wants you to purchase an annuity that will pay you $25,000 per year for 10 years. If you require a 7% return, what is the most you should pay for this investment?