Question

1- The mean and standard deviation of a process are given as 9.0 lbs and 0.5 lbs respectively. The percentage of items above 10 lbs is:

		approximately 1%
		approximately 3%
		approximately 2%
		less than 1% OR more than 4%
		approximately 4%

2-

1. Assuming that the maintenance costs are $50,000 each year for the first 5 years, $60,000 each year for years 6 through 10, $70,000 each year for years 11 through 15, and $80,000 each year after that. How large the gift should be to cover all these expenses if the interest is 12% compounded monthly?

   		between $473,000 and $473,500
   		less than $473,000 OR more than $475,000
   		between $473,500 and $474,000
   		between $474,500 and $475,000
   		between $474,000 and $474,500

2.   
   3-

3. Calculate the simple payback and discounted payback periods for the following investment project at i = 10% compounded annually (values giveen as a pair for the year and amount): (0, -$3000), (1, $700), (2, $700), and (3, $2000)

   		All the other answers are incorrect.
   		simple payback between 2.75 years and 2.85 years and discounted payback does not exists
   		simple payback between 2.85 years and 2.95 years and discounted payback between 3.45 and 3.45 years
   		simple payback between 2.75 years and 2.85 years and discounted payback between 3.45 and 3.55 years
   		simple payback between 2.85 years and 2.95 years and discounted payback does not exists

4. Determine the two equal deposits (the first deposit required at the end of year 2 and the second deposit at the end of year 6) so that you can withdraw $5,000 at the end of each year for the next 8 years (year 1 through 8). Assume that money can earn 10% interest, compounded annually.

   		between $19,171 and $19,175
   		between $19,181 and $19,185
   		All the other answers are incorrect.
   		between $19,176 and $19,180
   		between $19,995 and $20,000

6-

Assume that you borrowed 300,000 from ABC Bank to purchase a house and agreed to pay the loan in monthly installments over next 30 years (total 360 payments). The mortgage rate is 8% compounded daily and you make payments each month starting end of first month from the date you borrow the money. Assume 360 days per year and use at least four decimal places in all calculations (for example 1.2345% or $1.2345). The amount of principal (installment amount - interest in that payment) paid in your 125th payment is:

		between $460.0 - $462.5
		Less than $455.0 OR more than $465.0
		between $457.5 - $460.0
		between $455.0 - $457.5
		between $462.5 - $465.0

Answer 1

Q1.