Suppose you have two possible projects, both with no risk. You can choose to invest in Project 1, or in Project 2, or in none. In Project 1 you have to invest 200 and you will obtain 240 after one period. In Project 2 you have to invest 600 and you will obtain 660 after one period. Chose

the right statement about option:

A. r1>r2; choose Project 1 B. r1>r2; choose Project 2 C. r2>r1; choose Project 1 D. r2>r1; choose Project 2 

Problem 4

the rates of return and the best economic

Suppose you have two possible projects, both with no risk. You can choose to invest in Project 1, or in Project 2, or in none. In Project 1 you have to invest 200 and you will obtain 240 after one period. In Project 2 you have to invest 100 and you will obtain 150 after one period. Chose the right statement about the rates of return and the best option:

A. r1>r2; choose Project 1 B. r1>r2; choose Project 2 C. r2>r1; choose Project 1 D. r2>r1; choose Project 2 

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Problem 5

You invest 9500 USD at 8% APR for one year, how much money you will have at the end of the year?

A. 7500 USD B. 9500 USD C. 10260 USD D. 8025 USD 

Problem 6

9500 USD at r% APR for one year, if you have 9880 at the

You invested your principal at 5% APR for one year, if you have 9007 USD at the end, find your principal?

A. 8578.10 USD B. 7500.00 USD C. 6004.67 USD D. 8962.19 USD 

Problem 8 You invest 5000 at rate 20% APR for four years, find how much money you have at the end of the fifth year:

A. 12,441.60 B. 5,520.40 C. 9,953.28 D. 10,368.00 

Problem 9

What is the FALSE statement? 

A. When we move money from the future we say we are discounting. B. When we move money to the future we say we are compounding. C. One dollar today worth more than one dollar tomorrow. D. One risky dollar worth more than a safe dollar.

Problem 10

Suppose you have 1000 USD and you have two projects. In Project 1 you can obtain a rate return of 9% but you can invest at most 500. In Project 2 you can obtain a rate of return of 6% and you can invest any quantity between 0 USD and 2000 USD. Suppose you cannot borrow money or invest in another way your money. Assume the same risk for both projects. How much money you will have after one period?

A. 1075 USD B. 1090 USD. C. 1060 USD. D. 1072 USD. 

You invested end, what was the interest rate r?

A. 2.0% B. 3.0% C. 4.0% D. 5.0% 

Problem 7

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Problem 11

You invest 1500 at rate 4% APR compounded quarterly for one year, find the interest rate you will use to compound and how much money you have at the end of the year:

A. 0.01; 1560.91 B. 0.02; 1560.60 C. 0.04; 1560.00 D. 0.08; 1558.85 

Problem 12

You invest 900 at rate 8% APR compounded semiannually for 8 years, find the interest rate you will use to compound and how much money you have at the end of the third year:

A. 0.04; 1440.93 B. 0.04; 1685.68 C. 0.02; 1141.42 D. 0.02; 1235.51 

Problem 13

If the interest rate is 8% and is composed monthly, calculate the EAR:

A. 0.1047 B. 0.1020 C. 0.0830 D. 0.0512 

Problem 14

If the interest rate EAR is 5.4% and is composed quarterly, calculate the APR interest rate:

A. 5.386% B. 5.294% C. 5.459% D. 5.571% 

Problem 15

Suppose that the interest rate is r=3%. Calculate the present value of a security paying 200 in 7 years:

A. 142.14 B. 162.62 C. 177.70 D. 31.87 

Problem 16

Suppose that the interest rate is r = 12% for every future period. Consider a cash flow paying 90 every year, starting at the end of the first year, for the next 4 years. Find the present value:

A. 288.09 B. 273.36 C. 224.43 D. 306.16 

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Problem 17

Suppose that the interest rate is r = 12% for every future period. Consider a cash flow paying 90 every year, starting today until the

beginning

A. 288.09 B. 273.36 C. 224.43 D. 306.16 

Problem 18

Suppose that you take a mortgage for 20 years, paying $1800 at the end

of each month mortgage.

A. 209,371.16 B. 251,245.39 C. 343,583.23 D. 273,161.54 

Problem 19

at a rate of 6% APR. Calculate the present value of that

of year 4 (end of year 3). Find the present value: 

Suppose that you take a mortgage for 20 years, paying $1500 at the end of each month at a rate of 6% APR. Calculate the future value of that mortgage.

A. 876,221.74 B. 1114,877.71 C. 831,673.61 D. 793,061.22 

Problem 20

Suppose that you have a business in which you obtain 20 at the end of each year during six years, and at the end of the seventh year you have to pay 150. Mark the right answer:

Suppose that could be only two possible scenarios, r=5% or r=9%.

A. In both cases you do the business. B. You do the business only in first case (r=5%). C. You do the business only in second case (r=9%). D. You dont do the business in none of the cases. 

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