FIN 571 TUTOR Career Path Begins/fin571tutor.com FIN 571 TUTOR Career Path Begins/fin571tutor.com | Page 14

different because of GAAP rules regarding the recognition of income.
different because cash inflows must occur before revenue recognition.
the same since they reflect current laws and accounting standards.
the same due to the requirements of GAAP.
8.One year ago, you invested $2,690. Today it is worth $3,800.50. What
rate of interest did you earn?
8. (Set 2)
Your credit card company charges you 1.00 percent per month. What is
the annual percentage rate on your account?
9. (Set 1)
What is the future value of $920 a year for 5 years at a 6 percent interest?
9. (Set 2)
Your credit card company charges you 1.00 percent per month. What is
the annual percentage rate on your account?
10.You just paid $361,000 for an annuity that will pay you and your heirs
$12,300 a year forever. What rate of return are you earning on this policy?
Some time ago, Julie purchased eleven acres of land costing $15,590.
Today, that land is valued at $63,123. How long has she owned this land if
the price of the land has been increasing at 6 percent per year?
11.First City Bank pays 6 percent simple interest on its savings account
balances, whereas Second City Bank pays 6 percent interest compounded
annually.
If you made a $57,000 deposit in each bank, how much more money
would you earn from your Second City Bank account at the end of 10
years? (Do not round intermediate calculations and round your answer to 2
decimal places, e.g., 32.16.)
11. (Set 2)
First City Bank pays 6 percent simple interest on its savings account
balances, whereas Second City Bank pays 6 percent interest compounded
annually.
If you made a $60,000 deposit in each bank, how much more money
would you earn from your Second City Bank account at the end of 10
years? (Do not round intermediate calculations and round your answer to 2
decimal places, e.g., 32.16.)
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