A tire manufacturer advertises that "one-half of our new all-season radial tire last at least 50,000 miles. An immediate adjustment will be made on any tire that does not last 50,000 miles." You purchased four of these tires. What is the probability that all four tires will wear out before traveling 50,000 miles?
Answer(s): D
1/2*1/2*1/2*1/2 = 1/16 where 1/2 is the probability that a tire will wear our before 50,000 miles.
The U.S. Department of Education reported that for the past six years 23, 19, 15, 30, 27 and 25 women received doctorate degrees in computer and information sciences. What is the mean arithmetic annual number of women receiving this degree?
Answer(s): E
(23 + 19 + 15 + 30 + 27 + 25)/6 = 23.2
If you have $4,000 in an account today and withdraw $2,000 in 3 years, how much can you withdraw from the account in 5 years, if the account earns interest at 8% per year, compounded annually?
Answer(s): A
The way to approach this problem is to find the PV today of the $2,000 amount, determine the difference between this amount and the original $4,000 amount, and then move this remaining amount to the 5 year point.On the BAII Plus, press 3 N, 8 I/Y, 2000 FV, 0 PMT, CPT PV, which yields $1,587.66. Then press + 4000 =.Then press PV, 5 N, CPT FV to see the answer. On the HP12C, press 3 n, 8 i, 2000 FV, 0 PMT, CPT PV. Then press 4000 +. Then press PV, 5 n, CPT FV to see the answer. Make sure the BAII Plus has the P/Y value set to 1.
If you buy a television for $650 and agree to pay for it with 24 payments of $30 (with the first payment occurring next month), what is the size of the final payment needed at month 24 to completely pay off the television? Assume the interest rate you are being charged is 16% per year, compounded monthly.
This question describes a situation often called a balloon payment. On the BAII Plus, press 24 N, 16 divide 12 = I/Y, 650 PV, 30 +/- PMT, CPT FV. On the HP12C, press 24 n, 16 ENTER 12 divide i, 650 PV, 30 CHS PMT, FV. The answer is shown as a negative number. Make sure the BAII Plus has the P/Y value set to 1.
How many annual deposits of $1,500, beginning next year, would you need to make before you had accumulated $30,000, if the money earns 9% per year, compounded annually? Assume the account begins with a $0 balance.
Answer(s): C
On the BAII Plus, press 9 I/Y, 0 PV, 1500 PMT, 30000 +/- FV, CPT N. On the HP12C, press 9 i, 0 PV, 1500 PMT, 30000 CHS FV, n. Note that the HP12C will display 12 as the answer.
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