A survey of top executives revealed that 35% of them regularly read Time magazine, 20% real Newsweek and 40% read U.S. News & World Report. Ten percent read both Time and U.S. News & World Report. What is the probability that a particular top executive reads either Time or U.S. News & World Report regularly?
Answer(s): D
35% + 40% - 10% = 65%
What is the annual Internal Rate of Return of this series of annual cash flows: Year 0: <$10,000>, Year 1:$5,000, Year 2: $5,000, Year 3: $7,500? (Note that the <> are used to indicate a negative number).
Answer(s): A
On the BAII Plus, press CF 2nd CLRWork 10000 +/- ENTER DownArrow 5000 ENTER DownArrow DownArrow 5000 ENTER DownArrow DownArrow 7500 ENTER DownArrow DownArrow 2nd Quit. Then press Irr CPT. On the HP12C, press these keys: 10000 CHS BlueShift CFo 5000 BlueShift CFj 5000 BlueShift CFj 7500 BlueShift CFj Then press YellowShift Irr. The "DownArrow" represents the downward-pointing arrow on the top row of the BAII Plus keyboard.
If your estate were to receive $100 a year, beginning next year, for 100 years, what is the equivalent single amount today that this series of cash flows is equal to, assuming interest is 5% per year, compounded annually?
Answer(s): E
On the BAII Plus, press 100 N, 5 I/Y, 100 PMT, 0 FV, CPT PV. On the HP12C, press 100 n, 5 i, 100 PMT, 0 FV, PV. Note that the answer will be displayed as a negative number. As a side note, continuing the $100 payments for 10,000 years only increases the PV today by a little over $15. This is because the $100 payments beyond 100 years from now would add very little to the PV today. Make sure the BAII Plus has the value of P/Y set to 1.
What monthly payment would repay a $28,500 car loan over 60 months, assuming your loan has an interest rate of 3.9% per year, compounded monthly?
On the BAII Plus, press 60 N, 3.9 divide 12 = I/Y, 28500 PV, 0 FV, CPT PMT. On the HP12C, press 60 n, 3.9 ENTER 12 divide i, 28500 PV, 0 FV, PMT. Note that the answer will be displayed as a negative number. Make sure the BAII Plus has the value of P/Y set to 1.
If you deposit $5,000 into an account paying 9% per year, compounded monthly, how much do you have in the account in 10 years?
On the BAII Plus, press 120 N, 9 divide 12 = I/Y, 5000 PV, 0 PMT, CPT FV. On the HP12C, press 120 n, 9 ENTER 12 divide i, 5000 PV, 0 PMT, FV. Note that the answer will be displayed as a negative number. Make sure the BAII Plus has the value of P/Y set to 1.
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