A pine plantation returns nothing to its owner in the first3years.

nothing

a.

b.

c.

d.

Kathy’s rich uncle promises her an allowance of $10,000 per month for 6 months, with the first allowance to be made 1 month from today. If the interest rate is 0.5% per month, what is the present value of the promised allowance?

a.The present value of investment is $58,963.84.

b.The present value of investment is $4,785.69.

c.

d.The present value of investment is $60,000.

Phantom Limited borrows $150,000 at an interest rate of 12% per annum compounding quarterly, repayable by equal quarterly instalments over 30 years. Calculate the principal and interest components of the first repayment.

a.For the first repayment, the principal component is $133.49 and interest component is $4,500. 

b.

c.

d.For the first repayment, the principal component is $133.49 and interest component is $4,200.

Starting with her next salary payment (next month), Kathy intends to save $200 each month. If the interest rate is 1% per month, how much will Kathy have saved after 12 months (12 deposits altogether over 12 months)?

Fill in the blank with the correct answer, rounded to 2 decimal places. 

12 months later (in month 12), Kathy would have _________ in the bank account. 

Using the following returns, calculate the average returns for Abundant and Slim.

 Returns (%)

Year

Abundant

Slim

2006

8

15

2007

5

-4

2008

-6

-9

2009

7

11

2010

12

6

2011

9

10

a.The average return for Share Abundant is 5.83% and 4.83% for Share Slim.

b.

c.

d.

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