1. What is the compound amount for a $25,000 initial principal that
earns a 3% interest rate compounded monthly for twenty years?
2. A couple plans to invest money for the college education of their
child. What initial principal must be deposited by the parents when their
child turns 8 in order to have $40,000 when the child reaches the age of 18 if
the invested money earns a 4% interest rate compounded quarterly?
3. What is the dividend yield of a stock that pays a dividend of $1.05
per share if the stock sells for $37.50 per share?
4. What is the total of the interest payments to the holder of a bond
with a $26,000 face value, a 2.5% coupon, and a twelve-year maturity?
5. (part A) mutual fund has $16 million in assets, $1 million
in liabilities, and 400,000 shares outstanding. For this mutual fund: (a) what is
the Net Asset Value and (b) how many shares will $1,800 buy?
6. For a house with a $270,000 selling price, the purchaser will make a
15% down payment. The purchaser of this house is being charged fees of $500
plus 2.5 points. What is the total dollar amount of the down payment and clo-
sing costs that the purchaser will have to pay at closing?
7. For each experiment below, write the sample space of the experim-
ent fully as a set in roster form. Use standard shorthand notations for the out-
comes of the experiments. For this problem, only the answers are required.
(a) (2 points) Roll a single standard six-sided die once: ____________________
(b) (2 points) Select a single-digit even whole number: ____________________
(c) (4 points) Take a single standard two-sided coin and toss the coin three times:
________________________________________________________________
8. How many five-digit positive whole numbers are there in which each
digit is nonzero and the five digits are all mutually different?
9. How many four-letter groups are there in which each letter is one of
the letters a, g, k, r, t, v, z?
10. In how many ways can a president, a vice president, and a treasurer
be selected from a corporate board with twelve members?
11. How many five-card poker hands can be dealt from a standard deck of
fifty-two playing cards with no jokers?
12. How many horizontal straight-line orderings are possible for the let-
ters of the word MISSISSIPPI?
13. When a single card is randomly drawn from a standard, well-shuffled
deck of fifty-two playing cards, what is the probability of drawing a face card?
14. When two standard unbiased six-sided dice are rolled once, what is the
probability of rolling a sum of 6?
15. When a single standard unbiased two-sided coin is tossed three times,
what is the probability that exactly two of the three tosses land on heads?
16. When a single standard unbiased two-sided coin is tossed FOUR times,
what is the probability that exactly two of the FOUR tosses land on heads?
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