21
22
37) Keisha has $3,500 now and plans on investing it in a fund that will pay her 12% interest
compounded quarterly. How much will Keisha have accumulated after 2 years? (PV of $1, FV of
$1, PVA of $1, and FVA of $1) (Use appropriate factor(s) from the tables provided.)
A) $4,340.00 B) $3,920.00 C) $4,433.80 D) $3,500.00 E) $4,390.40
38) How long will it take an investment of $25,000 at 6% compounded annually to accumulate to a
total of $35,462.50? (PV of $1, FV of $1, PVA of $1, and FVA of $1) (Use appropriate factor(s)
from the tables provided.)
A) 6 years B) 2 years C) 5 years D) 4 years E) 10 years
23
24
39) What annual interest rate is required to accumulate $6,802.50 in four years from an investment of
$5,000? (PV of $1, FV of $1, PVA of $1, and FVA of $1) (Use appropriate factor(s) from the
tables provided.)
A) 8% B) 12% C) 10% D) 15% E) 5%
25
40) Russell Company has acquired a building with a loan that requires payments of $20,000 every six
months for 5 years. The annual interest rate on the loan is 12%. What is the present value of the
building? (PV of $1, FV of $1, PVA of $1, and FVA of $1) (Use appropriate factor(s) from the
tables provided.)
A) $200,000 B) $147,202 C) $72,096 D) $86,590 E) $113,004
41) Pelcher Company acquires a machine by issuing a note that requires semiannual payments of
$4,000 for 3 years. The interest rate on the note is 10% compounded semiannually. What is the
cost of the machine? (PV of $1, FV of $1, PVA of $1, and FVA of $1) (Use appropriate factor(s)
from the tables provided.)
A) $17,421.20
B) $10,892.80
C) $20,302.80
D) $24,000.00
E) $ 9.947.41
27
42) Marc Lewis expects an investment of $25,000 to return $6,595 annually. His investment is earning
10% per year. How many annual payments will he receive? (PV of $1, FV of $1, PVA of $1, and
FVA of $1) (Use appropriate factor(s) from the tables provided.)
A) Five payments
B) More than six payments
C) Six payments
D) Four payments
E) Three payments
43) A company is considering an investment that will return $22,000 semiannually at the end of each
semiannual period for 4 years. If the company requires an annual return of 10%, what is the
maximum amount it is willing to pay for this investment? (PV of $1, FV of $1, PVA of $1, and
FVA of $1) (Use appropriate factor(s) from the tables provided.)
A) Not more than $88,000
B) Not more than $139,476
C) Not more than $69,738
D) Not more than $176,000
E) Not more than $142,190
29
44) What amount can you borrow if you make six quarterly payments of $4,000 at a 12% annual rate of
interest? (PV of $1, FV of $1, PVA of $1, and FVA of $1) (Use appropriate factor(s) from the
tables provided.)
A) $24,838.00
B) $21,668.80
C) $44,800.00
D) $40,000.00
E) $31,049.00
30
45) What amount can you borrow if you make seven semiannual payments of $4,000 at an 8% annual
rate of interest? (PV of $1, FV of $1, PVA of $1, and FVA of $1) (Use appropriate factor(s)
from the tables provided.)
A) $25,760.00
B) $28,000.00
C) $35,691.20
D) $31,049.00
E) $24,008.40
31
32
46) An individual is planning to set-up an education fund for her daughter. She plans to invest $7,000
annually at the end of each year. She expects to withdraw money from the fund at the end of 9
years and expects to earn an annual return of 8%. What will be the total value of the fund at the end
of 9 years? (PV of $1, FV of $1, PVA of $1, and FVA of $1) (Use appropriate factor(s) from the
tables provided.)
A) $50,400 B) $45,360 C) $87,413 D) $126,000 E) $68,040
47) An individual is planning to set-up an education fund for his grandchildren. He plans to invest
$10,000 annually at the end of each year. He expects to withdraw money from the fund at the end
of 10 years and expects to earn an annual return of 8%. What will be the total value of the fund at
the end of 10 years? (PV of $1, FV of $1, PVA of $1, and FVA of $1) (Use appropriate factor(s)
from the tables provided.)
A) $67,107 B) $100,000 C) $144,866 D) $46,320 E) $215,890
48) Clara is setting up a retirement fund, and she plans on depositing $5,000 per year in an investment
that will pay 7% annual interest. How long will it take her to reach her retirement goal of $69,082?
(PV of $1, FV of $1, PVA of $1, and FVA of $1) (Use appropriate factor(s) from the tables
provided.)
A) 20 years
B) 13.816 years
C) 10 years
D) 0.072 years
E) 5 years
49) Chris wants to accumulate $100,000 in 5 years. He plans on making equal semiannual deposits into
an investment account that earns 12% semiannually in order to reach his goal. How much must
Chris invest every six months? (PV of $1, FV of $1, PVA of $1, and FVA of $1) (Use
appropriate factor(s) from the tables provided.)
A) $7,586.79
B) $10,000.00
C) $24,331.19
D) $10,153.39
E) $13,586.77