PART 11: Circle T (True) or F (False) corresponding to the statement given below

Question

PART 11: Circle T (True) or F (False) corresponding to the statement given below. Expect accurate answers (30 points total) 1. (O F P-S1000, 10 years later F-$1791 then i-6% 2, T) F when P $500, F $983.5 and i-7% then n should be 10 years 3. T, 4, T I F $7052.1 is equivalent to $8250 two years later if i-8% compounded semi-annually F P-$500 i-6% compounded monthly then F-598.34 if n-3 years when F-370 and P-50 and-10% then n will be 20 APR(Annual percentage rate) could be greater or equal to APY(Annual percentage yield) For F-1197, n-3 years then P will be-S1000 if i-6% compounded annually T F You borrowed $5000 with 10% simple interest/year, the total repayment amount will-$6000 by the end Of 2 years. 9. TF EOY 1 2 10 cash flow 10 10 10 F THEN F-61.05 if i:10% 10. F EOY 4 40 Sh flow P 10 20 30 THEN F-43.78 if i-10% PART II Multiple Choices Questions: Circle the correct answer (4 points each, 40 points total) How many years? will it take to pay off a $2000 debt, with semiannually payments of $100 at the end of every month's period, if the interest is 6%/year, compounded semi-annually. A) 15.5 B) 62 C)18.5 D)16 E) 31 F) no answer If you deposit $5000 in a bank that paid interest of 6%/year, compounded monthly. Then the total sum of money by the end of year 3 is most nearly. A)/5900 B)4900 C)6000 D)6500 You deposit $1000/year at the beginning of each year for the next 5 years. However, you do not withdraw your money until the end of year 7. If you can earn 10% of interest/year, the total sum of your money at the end of year 7 is most nearly. A) 8125 B) 7540 C) 5225 FIU recently spent $200,000 to improve the landscaping areas around the main campus. All landscaping areas need to be re-enhanced every 10 years at the cost of $100,000. We assume that this project will last forever n-inf. If-10%, then the initial budget that needs to be allocated for re enhancing the landscaping areas every 10 years should be most nearly. A) 238550 1. 2. E) 7900 F) no answer 3. D) 6520 E) 8000 F) no answer 4. B) 614500 C)38550 D) 627000 E) 600000 F) no answer

Explanation / Answer

Part 1:

1. TRUE ( Reason 1000*1.06^10 = 1791)

2. TRUE (Reason 500*1.07^10 =983.5)

3. TRUE ( 500*(1+0.06/12)^36 = 598.34)

4. TRUE ( 7052.1*(1+0.08/2)^4 = 8250)

5. FALSE ( 50*1.10^20 = 336 and not 370)

6. FALSE (APY would be greater than APR becuase APY takes into account compounding periods)

7. FALSE (1000*1.06^3 = 1191 and not 1197)

8. TRUE ( Interest for two years = 5000*0.10*2 = 1000, prinicpal =5000, total = 6000)

9. FALSE ( FV = 10*1.10^4+10*1.10^3 +10*1.10^2+10.*1.10 = 51.05 and not 61.05)

10 FALSE ( PV = 40/1.10^4 +30/1.10^3 +20/1.10^2 +10/1.10 = 75.48 and not 43.48)

Note: we have answered all the 10 True/False in part !. Only one full question can be asnwered at a time. Kindly post the other seperately for experts to asnwer

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