# FIN 300 Study Guide - Midterm Guide: Effective Interest Rate, Annual Percentage Rate, Ryerson University

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Ryerson University

CFIN300

Midterm Exam

Fall 2007

There are 2.0 hours in this exam.

Version A

Student Name ____________________________

(Please Print)

Student Number _________________________________

Notes:

1. This is a closed book exam. You may only have pens, pencils and a calculator at

your desk.

2. A formula sheet is attached to the end of the exam. You may detach the formula

sheet from the exam.

Please fill out the scanner sheet as you go along in the exam. You will not be given extra time at

the end of the exam to fill it out.

3. Select the best possible answer for each multiple-choice question

4. Each of the 30 MC questions is worth 1 mark

Marks: Available

Total 30 _________

CFIN300 Midterm Exam Fall 2007

There are 14 pages in this exam.

Page 2

CFIN300 Midterm Exam Fall 2007

2. Poor Dog, Inc. borrowed $135,000 from the bank today. They must repay this money over the

next six years by making monthly payments of $2,215.10. What is the interest rate on the loan?

Express your answer with annual compounding.

A) 5.98%

B) 6.63%

C) 4.71%

D) 5.65%

E) 5.80%

3. How much would you pay for a security that pays you $500 every 4 months for the next

10 years if you require a return of 8% per year compounded monthly?

A) $11,228.48

B) $15,000.00

C) $10,260.00

D) $13,724.90

E) $10,200.23

4. You can earn 5% per year compounded annually for the next 4 years, followed by 8% per

year compounded quarterly for 5 years. What is the average annual compounded rate of

return over the 9 year period? Express your answer with monthly compounding.

A)

B) 6.82%

C) 6.97%

D) 6.43%

E) 6.59%

5. You have just purchased a house for $540,000 with a $200,000 down payment. You are

going to get a mortgage at the TF bank for the balance. TF is charging a rate of 5.8% per

year compounded semi-annually on 5 year term mortgages. You want to make weekly

payments amortized over 20 years. What is your weekly payment?

A) $877.60

B) $549.01

C) $545.47

D)

E) $871.92

6. Master Meter is planning on constructing a new $20 million facility. The company plans

to pay 20% of the cost in cash and finance the balance. How much will each monthly loan

payment be if they can borrow the necessary funds for 30 years at 9% per year

compounded semi-annually?

A) $128,740

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