Exam FM (Financial Mathematics) Years Practice Questions

A company invests $10,000 at an interest rate of 5% compounded annually. What will be the total amount after 3 years?

• AA. $11,576.25
• BB. $11,500.00
• CC. $11,250.00
• DD. $12,000.00

If a bond pays a coupon of $50 annually and has a yield to maturity of 5%, what is its price if it matures in 5 years?

• AA. $1,000.00
• BB. $800.00
• CC. $925.00
• DD. $873.00

If a financial asset costs $5,000 today and is expected to generate cash flows of $2,000 per year for 3 years, what is the net present value (NPV) if the discount rate is 8%?

• AA. $1,000.00
• BB. $500.00
• CC. $862.84
• DD. $150.00

You purchased an asset for $8,000, and you expect to sell it for $10,000 after 5 years. If the discount rate is 5%, what is the present value of the future selling price?

• AA. $9,000.00
• BB. $6,500.00
• CC. $7,700.00
• DD. $7,500.00

An investment of $1,200 at a rate of 4% compounded semi-annually grows to what amount in 10 years?

• AA. $1,480.00
• BB. $1,600.00
• CC. $1,580.82
• DD. $1,533.76

You invest $1,000 in an interest-bearing account with a rate of 3% compounded quarterly. What will be the amount in the account after 5 years?

• AA. $1,300.00
• BB. $1,200.00
• CC. $1,150.00
• DD. $1,159.27