39. You bought a painting 10 years ago as an investment. You originally paid $85,000 for...
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39. You bought a painting 10 years ago as an investment. You originally paid $85,000 for it. If you sold it for $484,050, what was your annual return on investment? A) 47% B) 4.7% C) 19% D) 12.8% Answer: 40. What is the present value of $12,500 to be received 10 years from today? Assume a discount rate of 8% compounded annually and round to the nearest $10. A) $5,790 B) $11,574 C) $9,210 D) $17,010 Answer: 41. You wish to borrow $2,000 to be repaid in 12 monthly installments of $189.12. The annual interest rate is A) 24%. B) 8%. C) 18%. D) 12%. Answer: annuities involve depositing money at the end of the period and allowing it to grow. 42. A) Discount B) Compound C) Annuity due D) Both B and C Answer: 43. Francis Peabody just won the $89,000,000 California State Lottery. The lottery offers the winner a choice of receiving the winnings in a lump sum or in 26 equal annual installments to be made at the beginning of each year. Assume that funds would be invested at 7.65%. Francis is trying to decide whether to take the lump sum or the annual installments. What is the amount of the lump sum that would be exactly equal to the present value of the annual installments? Round off to the nearest $1. A) $89,000,000 B) $38,163,612 C) $13,092,576 D) $41,083,128 Answer: 39. You bought a painting 10 years ago as an investment. You originally paid $85,000 for it. If you sold it for $484,050, what was your annual return on investment? A) 47% B) 4.7% C) 19% D) 12.8% Answer: 40. What is the present value of $12,500 to be received 10 years from today? Assume a discount rate of 8% compounded annually and round to the nearest $10. A) $5,790 B) $11,574 C) $9,210 D) $17,010 Answer: 41. You wish to borrow $2,000 to be repaid in 12 monthly installments of $189.12. The annual interest rate is A) 24%. B) 8%. C) 18%. D) 12%. Answer: annuities involve depositing money at the end of the period and allowing it to grow. 42. A) Discount B) Compound C) Annuity due D) Both B and C Answer: 43. Francis Peabody just won the $89,000,000 California State Lottery. The lottery offers the winner a choice of receiving the winnings in a lump sum or in 26 equal annual installments to be made at the beginning of each year. Assume that funds would be invested at 7.65%. Francis is trying to decide whether to take the lump sum or the annual installments. What is the amount of the lump sum that would be exactly equal to the present value of the annual installments? Round off to the nearest $1. A) $89,000,000 B) $38,163,612 C) $13,092,576 D) $41,083,128 Answer:
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The detailed answer for the above question is provided below Painting Investment Question 40 Solution Calculate the total profit 484050 selling price ... View the full answer
Related Book For
Income Tax Fundamentals 2013
ISBN: 9781285586618
31st Edition
Authors: Gerald E. Whittenburg, Martha Altus Buller, Steven L Gill
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