Unit Test — Unit test Answers

Rochelle invests in 500 shares of stock in the fund shown below.Name of FundNAVOffer PriceHAT Mid-Cap$18.94$19.14Rochelle plans to sell all of her shares when she can profit $6,250. What must the net asset value be in order for Rochelle to sell?

Mark has invested in Evu Confectioners. He owns 220 shares of stock in Evu Confectioners, with each share costing him $14.79 apiece but paying a yearly dividend of $2.03. Mark also owns three par value $500 bonds from Evu Confectioners, each of which had a market value of 93.630 and which pay 8.8% interest. If Mark’s broker charges a commission of $55 per ten shares of stock bought or sold and a commission of 3% of the market value of each bond bought or sold, which aspect of Mark’s investment in Evu Confectioners has the greater percent yield, and how much greater is it?

Determine the amount needed such that when it comes time for retirement, an individual can make monthly withdraws in the amount of $2,154 for 30 years from an account paying 5.1% compounded monthly. Round your answer to the nearest cent.

Tami would like to withdraw $10,364.10 at the end of each year, for 10 years, from an account paying 2.3% compounded annually. Determine the amount needed in the account for Tami to do this. Round to the nearest cent.

Trent is 25 years old and works for a company that matches his 401(k) contribution up to 5%. The interest rate for his 401(k) is 7.3%. If he puts away 10% of his $32,000 salary every year, what would the total of his 401(k) be in 10 years? Round your answer to the nearest cent.

Solve the problem. Round to the nearest cent.Stan’s savings account has a balance of $2257. After 5 years, what will the amount of interest be at 10% compounded quarterly?

In the table below, we are given two annuity plans, A and B, and the amount invested into each plan every month. Given this information, determine which of the two investments is an ordinary annuity, and the amount invested over a 12 month period.

Pierce wishes to purchase a municipal bond with a par value of $500 from Chattahoochee County, and he is trying to decide which broker he should employ to purchase the bond. Broker A charges a 3.1% commission on the market value of each bond sold. Broker B charges a flat $24 for each bond sold. If the bond has a market rate of 88.754, which broker will give Pierce the better deal, and by how much?

Bonds from the city of Tavel Gorge worth $1,000 each are selling at 110.611. If Sean wishes to purchase three such bonds, how much can he expect to pay?

Which of the following retirement plans places a maximum amount that an individual can contribute to the fund in a given year at $5,000?

Suppose that a family wants to start a college fund for their child. If they can get a rate of 5.2%, compounded monthly, and want the fund to have a value of $55,500 after 20 years, how much should they deposit monthly? Assume an ordinary annuity and round to the nearest cent.

Rank the following kinds of bonds in order from least secure to most secure: Municipal, Corporate, Treasury

Jamie is 22 years old and works for a company that matches her 401(k) contribution up to 3%. The interest rate for her 401(k) is 8%. If she puts away 9.5% of her $41,000 salary every year, how much would she have saved in 10 years? Round your answer to the nearest cent.

RuthAnn is 28 years old and is retiring at the age of 65. When she retires, she estimates that she will need an annual income of $32,523 for 30 years. If RuthAnn contributes 11% of her annual income to a 401(k) paying 7.1% compounded annually, will she reach her goal for retirement given that her annual income is $36,278.13? If she does not make her goal then state by what amount she will need to supplement her income. Round all answers to the nearest cent.

Why would a Roth 401(k) investment plan allow you to invest the most amount of money?

A Roth Individual Retirement Account allows you to draw a fixed amount that is not taxed. The maximum amount that an individual can contribute annually to a Roth IRA is $5,000. Determine the future value of such an account given that the annual percent rate is 1.2%, and an annual payment of $2,675.32 is made at the end of each year for 30 years. Round to the nearest cent.

Edgar owns 234 shares of Cawh Consolidated Bank, which he bought for $21.38 apiece. Each share pays a yearly dividend of $3.15. Edgar also owns two par value $1,000 bonds from Cawh Consolidated Bank. The bonds had a market value of 105.166 when he bought them, and pay 8.3% interest yearly. Which aspect of Edgar’s investment in Cawh Consolidated Bank offers a greater percent yield, and how much greater is it?

Marnie makes regular annual payments of $5,000 to her Individual Retirement Account (IRA). If the amount of interest she earns is 5.6% per year, determine the future value of the account after 35 years. Round to the nearest cent.

What are the benefits of a long-term bond over a short-term bond?

Solve the problem. Round to the nearest cent.John deposited $2860 in a bank that pays 9% interest, compounded monthly. Find the amount he will have at the end of 3 years.