OPMT 1110 Test#3 2021 v2
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British Columbia Institute of Technology *
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Course
1110
Subject
Mathematics
Date
Feb 20, 2024
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doc
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5
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v. 2
Last Name
: First:
Set
: BRITISH COLUMBIA INSTITUTE OF TECHNOLOGY
Test #3
Course: Business Mathematics Course Number:
OPMT 1110
Instructor:
Judy Li, Daraghma Abdulrazik
Date: November 15, 2021
Time Allocated:
50 minutes
Total Marks:
36 marks
There are 5 pages in total including cover page.
For long answer questions, include all units, dollar signs, and percent signs in your final answer.
No one is permitted to leave the exam early.
Anyone who does not stop writing when told to do so will be penalized 10 marks.
Formulas and Calculator Instructions Provided
i = j/m
To switch to payments at the beginning of the interval:
Press 2ND BGN
(above PMT key). Display should show END.
Press 2ND SET
(above ENTER key). Display should show BGN.
Press CE/C (bottom left corner) or 2ND QUIT (top left corner).
Question
Marks
Obtained
Q. 1- 8 (MC)
16
Q. 9
9
Q. 10
11
Total
36
Multiple Choice (Circle the correct answer) (2 marks each)
1.
A microwave oven may be purchased by making $60 down payment, followed by $35 at the end of each month for 15 months. Interest is 6% compounded monthly. What is the selling price of the microwave? (a)
$564.58
(b)
$567.10
(c)
$444.58 (d)
$507.10
(e)
$504.58
2.
You set aside $240 at the beginning of every quarter into an account that pays 5% compounded quarterly. How much interest will you have earned at the end of two and a half years?
(a) $171.34
(b) $139.60
(c) $2,571.34 (d)
$2539.60 (e) $622.69
3.
You just leased a Honda Civic that sells for $25,350. The terms of your lease require you to make 60 payments of $310 per month with the first payment due the day the car was leased. At the end of 5 years, you would have to pay $11,862 to buy the car. What effective rate are you paying on the car lease? (a) 5.38%
(b) 5.60% (c) 5.51% (d) 31.87% (e) 5.46% 4.
Today you have $183,564.30 in your RRSP. You plan to contribute $5,000 every three months to your retirement plan starting three months from now. How many years will it take to reach $350,000 if your RRSP earns 3% effective? (a) 14.13years
(b) 24.00 years (c)
23.93 years
(d) 6.00 years
(e)
24.90 years
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5.
Several years ago, you purchased shares of BMO bank for $36/share. The bank pays a dividend of $0.75 per share every 3 months. When you go to sell your shares, the current interest rate is 5% compounded quarterly. How much is your expected gain (or loss) per share? The next dividend is due in 3 months. (a)
$24 loss
(b)
$1.05 gain (c)
$24 gain
(d)
$21 loss
(e)
$3.00 gain
6.
A few years ago, you paid $15,000 to buy a corporate bond with a face value (maturity value) of $15,000 that has a coupon rate of 4% payable semi-annually (pays $300 every 6 months). If the bond matures in 20 years, how much is it worth today if the interest rate for similar bonds is 7% compounded semi-annually?
(a)
$2,617.93
(b)
$6,936.75 (c)
$3,274.77 (d)
$10,084.92 (e)
$10,195.11
7.
You have $29,567.74 in your TFSA now that pays j
12 = 4.5%. Starting in one month you plan to withdraw $500/month until only $3,440 is left to pay for a trip. How many years will it takes until then? (a)
60 years (b) 5 years
(c)
6.15 years
(d) 73.79 years (e)
59.74 years
8.
An alumnus wants to donate a sum of money to BCIT that will provide a scholarship of $650.00 every 6 months forever
. If money can be invested at 5% compounded semi-annually and the first payment is to be awarded at the end of 1 year
, how much must he donate today? (a) $25,365.85 (b)
$ 26,000.00 (c) $24,747.17
(d) $13,000 (e) $26,650
9.
Ann Marie has just received a $55,029.41 inheritance from her Grandmother’s estate and decided to invest the fund into a savings account immediately. She will then use the funds accumulated in the 3 of 5
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savings account to purchase an annuity that would pay her $4000 monthly, starting exactly 10 years from now. How many years will this annuity last? The quoted interest rate for the entire duration is 12% compounded monthly. [9 marks]
B/E
P/Y
C/Y
N
I/Y
PV
PMT
FV
ANSWER (2 decimal places): _______________________
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10. John Doe just turned 45 and decided belatedly to save for his retirement. He opened a saving account with the Prudential Insurance and transferred $60,000 to the account immediately. John Doe
plans to deposit $400 each month for 15 years starting today. At his 60 the birthday, John Doe plans to withdraw $20,000 for a retiring vacation and use the rest of
the funds to set up an income annuity which will make a fixed monthly retirement payout to him for 10 years and the first retirement payout to John Doe will be on his 60
th
birthday. (a)
How much will John Doe receive as the monthly retirement payout? John Doe anticipates earning 6%, compounded monthly, the entire time. [9 marks]
B/E
P/Y
C/Y
N
I/Y
PV
PMT
FV
ANSWER (2 decimal places): _______________________
(b)
How much interest will John Doe earn over the entire 25 years? [2 marks]
ANSWER (2 decimal places): _______________________
5 of 5