you invest at an annual interest rate of 8% compounded quarterly? A) 20 years B) 25 years C) 30 years D) 35 years E) 40 years N = I/Y = PV = PMT= FV = 5. What is the present value of an investment that will be worth $50,000 in 10 years if the interest rate is 6% compounded semi-annually? A) $27,000 B) $30,000 C) $33,000 D) $36,000 E) $40,000 I/Y = PV = PMT= FV = P/Y = 6. What is the future value of an investment of $5,000 at 8% compounded quarterly for 15 years? A) $15,000 B) $20,000 C) $25,000 D) $30,000 E) $35,000 I/Y = PV = PMT= FV = P/Y = 7. What is the effective annual rate if the nominal rate is 6% compounded monthly? A) 6.00% B) 6.17% C) 6.17% D) 6.18% E) 6.19% I/Y = PV = PMT= FV = P/Y = 8. What is the nominal rate if the effective annual rate is 8% compounded quarterly? A) 7.68% B) 7.72% C) 7.75% D) 7.78% E) 7.82% I/Y = PV = PMT= FV = P/Y = 9. What is the present value of an investment that will be worth $100,000 in 20 years if the interest rate is 5% compounded annually? A) $30,000 B) $40,000 C) $50,000 D) $60,000 E) $70,000 I/Y = PV = PMT= FV = P/Y = 10. What is the future value of an investment of $10,000 at 7% compounded semi-annually for 30 years? A) $50,000 B) $60,000 C) $70,000 D) $80,000 E) $90,000 I/Y = PV = PMT= FV = P/Y = Page 3 Part B: Short Answer Questions. Answer ALL questions in the space provided. 11. What is the present value of an investment that will be worth $75,000 in 15 years if the interest rate is 8% compounded annually? (3 marks) 12. What is the future value of an investment of $3,000 at 5% compounded quarterly for 20 years? (3 marks) 13. What is the effective annual rate if the nominal rate is 7% compounded semi-annually? (3 marks) 14. What is the nominal rate if the effective annual rate is 9% compounded quarterly? (3 marks) 15. What amount could Jethri borrow at 7.5% compounded monthly if he can afford to make monthly payments of $800 for 30 years? (3 marks) 16. What semi-annually compounded rate is equivalent to 6% compounded monthly? (3 marks) 17. If $2,500 were invested at the end of every four months, how long would it take to accumulate $500,000 at 12% compounded quarterly? (3 marks) 18. You currently have $30,000 and wish to invest it for retirement. If you wish to have $500,000, how long will it take if you invest at an annual interest rate of 9% compounded quarterly? (3 marks) 19. What is the present value of an investment that will be worth $150,000 in 25 years if the interest rate is 6% compounded semi-annually? (3 marks) 20. What is the future value of an investment of $7,500 at 9% compounded quarterly for 35 years? (3 marks) Total: 60 marks