Practice Question 3

(Keep two decimal places for all questions

Q1: Gasoline sold for RMB 8.72 per litre in Beijing and US$ 5.49 per gallon in Seattle. Find the percentage Beijing price lower than Seattle price. (1 US gallon = 3.785 litres, RMB 7.21 = US$1.00) _____(1)_____%. (Please pay attention to this %, if your answer is like 22.45%, you should input 22.45) Also find the percentage Seattle price higher than Beijing price._______(2)______%. (Please pay attention to this %, if your answer is like 22.45%, you should input 22.45)

Q2: The current exchange rate between Canadian dollar and British Pound is 1 Pound = 1.55 C$. If the C$ weakens by 1.25% relative to the British pound, how much will be C$ per British Pound? ______(3)_______.What is the percentage that British pound appreciates? ________(4)_______%. (Please pay attention to this %, if your answer is like 22.45%, you should input 22.45)

Q3: An investment promises the following payments: March 3 $1000; March 18 $2000; March 26 $3000. If the market interest rate is 5.16%, what is this investment value on March 28? _____(5)_______.What is this investment value on March 18? ______(6)_______. If you believe your required return for this investment should be 8.19%, how much are you willing to pay for this investment on March 1? ______(7)_______

Q4: Grandma Jones has $300,000 in a bank account, which pays her interest at 3.33%. What is the largest amount of money that she could take out now and still have $300,000 in 179 days ? _____(8)________

Q5: Clone Computers assembles and packages personal computer systems from brand-name components. Its Home Office PC System is assembled from components costing $1400 per system and sells for $2000. Labour costs for assembly are $100 per system. This product line's share of overhead costs is $10,000 per month. a) How many Home Office Systems must be sold each month to break even on this product line? _____(9)_____ b) What will be the profit or loss for a month in which 13 Home Office Systems are sold? ____(10)______