New User Special Price Expires in

Let's log you in.

Sign in with Facebook


Don't have a StudySoup account? Create one here!


Create a StudySoup account

Be part of our community, it's free to join!

Sign up with Facebook


Create your account
By creating an account you agree to StudySoup's terms and conditions and privacy policy

Already have a StudySoup account? Login here

Exam One Study Guide and Answers for Chapter Five

by: Aneesa Evans

Exam One Study Guide and Answers for Chapter Five FINA 3101

Marketplace > Clayton State University > Marketing > FINA 3101 > Exam One Study Guide and Answers for Chapter Five
Aneesa Evans
Clayton State
GPA 3.11

Preview These Notes for FREE

Get a free preview of these Notes, just enter your email below.

Unlock Preview
Unlock Preview

Preview these materials now for free

Why put in your email? Get access to more of this material and other relevant free materials for your school

View Preview

About this Document

This is the study guide for chapter five along with the answers. I will be taking this exam Feb.3!
Corporate Finance
Professor Chen-Miao Lin
Study Guide
Math, finance, Corporate Finance
50 ?




Popular in Corporate Finance

Popular in Marketing

This 2 page Study Guide was uploaded by Aneesa Evans on Tuesday January 26, 2016. The Study Guide belongs to FINA 3101 at Clayton State University taught by Professor Chen-Miao Lin in Spring 2016. Since its upload, it has received 82 views. For similar materials see Corporate Finance in Marketing at Clayton State University.

Similar to FINA 3101 at Clayton State


Reviews for Exam One Study Guide and Answers for Chapter Five


Report this Material


What is Karma?


Karma is the currency of StudySoup.

You can buy or earn more Karma at anytime and redeem it for class notes, study guides, flashcards, and more!

Date Created: 01/26/16
FINA 3101 Test 1 Study Guide 1.You sold 100 shares of stock recently for $25 per share that you paid $20 per share for 4 years ago. Determine the average annual rate of return on your investment, assuming the stock paid no dividends. 2. You are currently investing your money in a bank account that has a nominal annual rate of 7%, compounded annually.  How many years will it take for you to triple your money? 3. Your father has $500,000 and wants to retire.  He expects to live for another 20 years, and he also expects to earn 8% on his invested funds.  How much could he withdraw at the beginning of each of the next 20 years and end up with zero in the account? 4. What is the present value of a perpetuity that pays $100 per year if the appropriate interest rate is 6.5%? 5. Suppose today you have $5,000 and plan to purchase a 4­year certificate of deposit  (CD) that pays 6% interest, compounded quarterly.  How much will you have when the  CD matures? 6. An investment costs $1200 and is expected to produce cash flows of 100 a year in Years 1 through 5, $400 a year in Years 6 through 8.  What rate of return would you earn if you bought this investment? 7. After graduation, you plan to work for Mega Corporation for 10 years and then start your own business.  You expect to save $5,000 a year for the first 5 years and $10,000 annually for the following 5 years, with the first deposit being made a year from today.  In addition, your  grandfather  just  gave  you  a $10,000  graduation   gift  which   you will  deposit immediately.  If the account earns 8% compounded annually, what how much will you have when you start your business 10 years from now? 8. After watching “Who Wants to Be a Millionaire”, you have decided you want to join the millionaire’s club.  Your goal is to have $1,000,000 in 25 years.  If you can invest in a mutual fund that you project will earn a 12%  p.a. return, how much must you invest at the end of each year to meet your goal? 9. You are interested in investing your money in a bank account.  Which of the following banks provides you with the highest effective rate of interest?       Bank 1; 8.0% with annual compounding. Bank 2; 8.0% with quarterly compounding. Bank 3; 7.9% with daily (365­day) compounding. Bank 4; 8.2% with annual compounding. (Use the following information for questions 10­12) You are buying your first house for $140,000, and are paying $25,000 as a down payment. You have arranged a   30­year mortgage and a nominal annual rate of 7%. All payments are made at the end of each month. 10. What is the monthly payment on the mortgage? 11. What is the remaining balance on the mortgage after 1 year? 12. How much of your 4th monthly payment will go toward the repayment of principal? 13. You have saved $3,000 for a down payment on a new car. The largest monthly payment you can afford is $300. The loan will have a 6% APR based on end­of­month payments. What is the most expensive car you can afford if you finance it for 48 months? Concepts: 1. The more the compound frequency, the higher the effective interest rate. 2. For loan amortization, as time goes by, the proportion of payments going toward to  interest decreases and the proportion of payments going toward to principal increases.   Answers: 1. 10.67% 2. 16.2376 3. 47,153.80 4. $1538.46 5. 6344.9277 6. 6.3197% 7. $123,355.0671 8. $7,499.97 9. bank 2 10. $765.0979 11. $113831.8185 12. 95.9238 13. 15,774.0953


Buy Material

Are you sure you want to buy this material for

50 Karma

Buy Material

BOOM! Enjoy Your Free Notes!

We've added these Notes to your profile, click here to view them now.


You're already Subscribed!

Looks like you've already subscribed to StudySoup, you won't need to purchase another subscription to get this material. To access this material simply click 'View Full Document'

Why people love StudySoup

Bentley McCaw University of Florida

"I was shooting for a perfect 4.0 GPA this semester. Having StudySoup as a study aid was critical to helping me achieve my goal...and I nailed it!"

Jennifer McGill UCSF Med School

"Selling my MCAT study guides and notes has been a great source of side revenue while I'm in school. Some months I'm making over $500! Plus, it makes me happy knowing that I'm helping future med students with their MCAT."

Steve Martinelli UC Los Angeles

"There's no way I would have passed my Organic Chemistry class this semester without the notes and study guides I got from StudySoup."


"Their 'Elite Notetakers' are making over $1,200/month in sales by creating high quality content that helps their classmates in a time of need."

Become an Elite Notetaker and start selling your notes online!

Refund Policy


All subscriptions to StudySoup are paid in full at the time of subscribing. To change your credit card information or to cancel your subscription, go to "Edit Settings". All credit card information will be available there. If you should decide to cancel your subscription, it will continue to be valid until the next payment period, as all payments for the current period were made in advance. For special circumstances, please email


StudySoup has more than 1 million course-specific study resources to help students study smarter. If you’re having trouble finding what you’re looking for, our customer support team can help you find what you need! Feel free to contact them here:

Recurring Subscriptions: If you have canceled your recurring subscription on the day of renewal and have not downloaded any documents, you may request a refund by submitting an email to

Satisfaction Guarantee: If you’re not satisfied with your subscription, you can contact us for further help. Contact must be made within 3 business days of your subscription purchase and your refund request will be subject for review.

Please Note: Refunds can never be provided more than 30 days after the initial purchase date regardless of your activity on the site.