Suppose you were given $4,000 today and deposited it into an account paying 8% per year, compounded monthly. If you know that you will need $5,000 in the account 10 years from now, what monthly withdrawal can you make from the account, beginning one month from now, that will leave the account with exactly $5,000 in it in 10 years?
Answer(s): B
On the BAII Plus, press 120 N, 8 divide 12 = I/Y, 4000 PV, 5000 +/- FV, CPT PMT. On the HP12C, press 120 n, 8 ENTER 12 divide i, 4000 PV, 5000 CHS FV, PMT. Note that the answer is a negative number, indicating that this is a monthly withdrawal that can be made from the account in addition to the $5,000 in 10 years. Make sure the BAII Plus has the value of P/Y set to 1.
Which of the following is /are true?
Answer(s): G
The median of a set with odd number of observations equals the "middle" observation. If the number of observations is even, the median is the mean of the two middle observations. From this, I & II follow. (III) is not necessarily true.
A discrete probability distribution is the same as:
Answer(s): C
The relative probability distribution of a set shows the relative frequency in each category in which the observation set is subdivided i.e. it shows the percentage of the observation set lying in each class.This also represents the probability distribution of the observation set.
In the regression equation, what does the letter "b" represent?
Answer(s): A
The regression is written as Y' = a + bX. The letter "a" is the Y intercept and b is the slope of the line.
How many years will it take money to double at 7.25% per year, compounded annually?
Answer(s): E
To solve this question, choose a future value that is twice the size of the present value. The actual number will not matter. On the BAII Plus, press 7.25 I/Y, 1000 PV, 0 PMT, 2000 +/- FV, CPT N. On the HP12C, press 7.25 i, 1000 PV, 0 PMT, 2000 CHS FV, n. Note that the HP12C will show 10 for the answer. The answer will be the same as long as the FV is twice as large as the PV. Make sure that the BAII Plus has the P/Y value set to 1.
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