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September 17, 2014

Quiz #1 Examination
Version #1 Solutions

Name: __________________________
Student ID #: _____________________

of the following offences: plagiarism or cheating of any kind, use of books, notes,
mathematicaltables,dictionariesorotherstudyaidunlessanexplicitwrittennotetothe
notbeenpreviouslyauthorizedinwriting.

Statementtobesignedbythestudent:
Signed:______________________________________
Formulas:

FVN PV0 1 I

PV0

FVN

1 I

FVN

PV0

FVN

PV0
N
ln 1 I
ln

There are 4 questions on this quiz. Each question counts 1 marks. Question 1 is on this
page and questions 2, 3, and 4 are on the back side of this page.
1. You are investing \$5,000 today for 7 years at an effective annual interest rate of 8%. What is
the future value of this investment in 7 years?
FVN PV0 1 I \$5, 000 1.087 \$8,569.12
N

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mark for correct entries for N, I/Y, & PV

September 17, 2014

Quiz #1 Examination
Version #1 Solutions

Name: __________________________
Student ID #: _____________________

2. How long would it take you to triple your money if you can invest at an effective annual interest
rate of 11.61%?

FVN
\$3
ln

PV0
1.09861229
\$1
N

10.00
ln 1 I
ln 1.1161 0.10984047
ln

Scientific Calculator
mark EACH for correct formula, all data entries correct, and correct answer
Financial Calculator
mark EACH for correct P/Y, all other data entries correct, and correct answer
NB. The signs of FV and PV must be opposing to avoid an error message.
3. You expect to receive \$50,000 in 20 years. What is the present value today of this amount if
the effective annual interest rate is 8%?
PV0

FVN

1 I

\$50, 000

1.08

20

\$10, 727.41

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mark EACH for correct formula, all data entries correct, and correct answer
Financial Calculator
mark EACH for correct P/Y, all other data entries correct, and correct answer
4. You are investing \$15,000 today and expect to receive \$28,056.22 in 6 years. What is the
effective annual interest rate that you expect to earn?
FVN
I

PV0

\$28, 056.22
1

\$15, 000

1 .1100 or 11.00%

Scientific Calculator
mark EACH for correct formula, all data entries correct, and correct answer
Financial Calculator
mark EACH for correct P/Y, all other data entries correct, and correct answer
NB. The signs of FV and PV must be opposing to avoid an error message.