1- Angelina just deposited $15,000 into an account at The Compound Bank. The bank will pay 4.5 percent interest compounded annually on this money. How much interest on interest will Angelina earn over the next 10 years?
2-You invests $10,000 today into a retirement account. you expects to earn 11 percent, compounded annually, on his money for the next 25 years. After that,you wants to be more conservative, so only expects to earn 7 percent, compounded annually. How much money will you have in his account when you retires 40 years from now, assuming this is the only deposit you makes into the account?
3- The Boston Clothing Co. has $1,000 face value bond outstanding with a market price of $1,058.89. The bond pays interest annually, matures in 12 years, and has a yield to maturity of 8.21 percent. What is the current yield ?
4- Ramon Rodriquez has just signed a $8 million contract. The contract calls for a payment of $1 million today, $1.5 million one year from now, $2.5 million two years from now, and $3.0 million three years from today. What is this contract really worth if Ramon can earn 10.5 percent on his money?
5-The Purple Pillow is a local hotel . This establishment spent $20,500,000 to create the current facility. They borrowed 75 percent of the cost at 6.626 percent interest for 15 years. What is the amount of each monthly payment?
6-Dollar, Inc. wants to offer preferred stock for sale at a price of $40 a share. The company wants its investors to earn an 8.5 percent rate of return. What is the minimum annual dividend the firm will need to pay per share?
7-Ben Lake Enterprises is currently considering a project that will produce cash inflows of $3,500 a year for t3 years followed by 1,200
a year for 2 more years. The cost of the project is $10,000. What is the profitability index if the discount rate is 7 percent?
8- Large Trees,Inc, is considering a project which will produce cash inflows of $145,000 a year for 2 years followed by $75,000 a year for the following 4 years .What is the internal rate of return if the initial cost of the project is $400,00?