Question 1

If the value of the principal today is $12,000 and the interest rate is 10.5%,what is the total compounding contribution at the end of two years?

Accepted Answer

A) $125.25 
B) $100.56 
C) $132.30 
D) $450.50 
E) None of the above. 
A) $125.25 
B) $100.56 
C) $132.30 
D) $450.50 
E) None of the above.

Question 2

The present value of a sum is:

Accepted Answer

A) The value of the sum at the end of a given period of time. 
B) The value of the sum at the beginning of a given period of time. 
C) The value of investing the sum at the beginning of the given period of time rather than at the end. 
D) The value of investing the sum at the end of the given period of time rather than at the beginning. 
E) None of the above. 
A) The value of the sum at the end of a given period of time. 
B) The value of the sum at the beginning of a given period of time. 
C) The value of investing the sum at the beginning of the given period of time rather than at the end. 
D) The value of investing the sum at the end of the given period of time rather than at the beginning. 
E) None of the above.

Question 3

If the value of the principal today is $10,250 and the interest rate is 1.5%,what is the value of the principal at the end of three years?

Accepted Answer

A) $10,540.45 
B) $10,718.20 
C) $10,900.35 
D) $12,245.45 
E) $12,234.43 
A) $10,540.45 
B) $10,718.20 
C) $10,900.35 
D) $12,245.45 
E) $12,234.43

Question 4

What is the future value of $25,000 invested today for the next 22 years if the interest rate is 17.5 percent?

Accepted Answer

A) $200,200.87 
B) $868,506.50 
C) $1,200,000.45 
D) $1,250,000.54 
E) None of the above. 
A) $200,200.87 
B) $868,506.50 
C) $1,200,000.45 
D) $1,250,000.54 
E) None of the above.

Question 5

What is the future value of $15,000 invested today for the next 7 years if the interest rate is 17.5 percent,and the interest rate is compounded 12 times per year?

Accepted Answer

A) 45,600.98 
B) 50,612.76 
C) 22,205.44 
D) 120,980.30 
E) None of the above. 
A) 45,600.98 
B) 50,612.76 
C) 22,205.44 
D) 120,980.30 
E) None of the above.

Question 6

Approximately how long will it take for an investment to double in value if the interest rate is 10.5%?

Accepted Answer

A) 6.86 years. 
B) 5.86 years 
C) 5.36 years 
D) 7.36 years. 
E) 2.36 years. 
A) 6.86 years. 
B) 5.86 years 
C) 5.36 years 
D) 7.36 years. 
E) 2.36 years.

Question 7

What is a perpetual annuity?

Accepted Answer

A) A stream of investment payments that are funded through borrowing. 
B) A stream of investment payments that are assumed to continue forever. 
C) An annuity investment that is passed down as an inheritance. 
D) All of the above. 
E) None of the above. 
A) A stream of investment payments that are funded through borrowing. 
B) A stream of investment payments that are assumed to continue forever. 
C) An annuity investment that is passed down as an inheritance. 
D) All of the above. 
E) None of the above.

Question 8

What is the internal rate of return?

Accepted Answer

A) The discount rate that makes the cash inflows equal to the cash outflows. 
B) The discount rate that the firm uses to calculate the profit margin. 
C) The discount rate after adjusting for inflation. 
D) The difference between nominal and real returns. 
E) None of the above. 
A) The discount rate that makes the cash inflows equal to the cash outflows. 
B) The discount rate that the firm uses to calculate the profit margin. 
C) The discount rate after adjusting for inflation. 
D) The difference between nominal and real returns. 
E) None of the above.

Question 9

If the value of the principal today is $17,567 and the interest rate is 0.93%,what is the total simple interest income at the end of fifteen years?

Accepted Answer

A) $17,567 
B) $2,540.60 
C) $82,765.65 
D) $300.56 
E) None of the above. 
A) $17,567 
B) $2,540.60 
C) $82,765.65 
D) $300.56 
E) None of the above.

Question 10

A client has taken out a $300,000 loan,which must be repaid with equal annual payments for the next 30 years.If the interest rate on the loan is 4.5%,what are the annual payments?

Accepted Answer

A) $18,417.46 
B) $19,455.46 
C) $12,455.46 
D) $17,417.46 
E) None of the above. 
A) $18,417.46 
B) $19,455.46 
C) $12,455.46 
D) $17,417.46 
E) None of the above.

Question 11

If the value of the principal today is $10,000 and the interest rate is 21.22%,what is the total compound interest income at the end of six years?

Accepted Answer

A) $21,728.22 
B) $25,567.43 
C) $20,000.54 
D) $45,067.22 
E) None of the above. 
A) $21,728.22 
B) $25,567.43 
C) $20,000.54 
D) $45,067.22 
E) None of the above.

Question 12

What is the present value of $100,500 to be received 23 years from now if the interest rate is 7.5 percent?

Accepted Answer

A) $19,044.58 
B) $163,565.44 
C) $16,447.34 
D) $26,200.30 
E) None of the above. 
A) $19,044.58 
B) $163,565.44 
C) $16,447.34 
D) $26,200.30 
E) None of the above.

Question 13

The APR:

Accepted Answer

A) Adjusts for inflation. 
B) Is always compounded multiple times per year. 
C) Adjusts for items such as loan processing fees,mortgage insurance,and points. 
D) Is the rate associated with perpetual annuities. 
E) None of the above. 
A) Adjusts for inflation. 
B) Is always compounded multiple times per year. 
C) Adjusts for items such as loan processing fees,mortgage insurance,and points. 
D) Is the rate associated with perpetual annuities. 
E) None of the above.

Question 14

If the value of the principal today is $25,000 and the interest rate is 22.5%,what is the value of the principal at the end of one year?

Accepted Answer

A) $5,625 
B) $30,250 
C) $5,825 
D) $30,625 
E) None of the above. 
A) $5,625 
B) $30,250 
C) $5,825 
D) $30,625 
E) None of the above.

Question 15

What is the nominal return?

Accepted Answer

A) The return on assets based on the actual number of dollars received. 
B) The return on assets based on the inflation-adjusted number of dollars received. 
C) The return on assets assuming compounding one time per year. 
D) The return on assets based on the APR. 
E) None of the above. 
A) The return on assets based on the actual number of dollars received. 
B) The return on assets based on the inflation-adjusted number of dollars received. 
C) The return on assets assuming compounding one time per year. 
D) The return on assets based on the APR. 
E) None of the above.

If the value of the principal today is $12,000 and the interest rate is 10.5%,what is the total compounding contribution at the end of two years?

The present value of a sum is:

If the value of the principal today is $10,250 and the interest rate is 1.5%,what is the value of the principal at the end of three years?

What is the future value of $25,000 invested today for the next 22 years if the interest rate is 17.5 percent?

What is the future value of $15,000 invested today for the next 7 years if the interest rate is 17.5 percent,and the interest rate is compounded 12 times per year?

Approximately how long will it take for an investment to double in value if the interest rate is 10.5%?

What is a perpetual annuity?

What is the internal rate of return?

If the value of the principal today is $17,567 and the interest rate is 0.93%,what is the total simple interest income at the end of fifteen years?

A client has taken out a $300,000 loan,which must be repaid with equal annual payments for the next 30 years.If the interest rate on the loan is 4.5%,what are the annual payments?

If the value of the principal today is $10,000 and the interest rate is 21.22%,what is the total compound interest income at the end of six years?

What is the present value of $100,500 to be received 23 years from now if the interest rate is 7.5 percent?

The APR:

If the value of the principal today is $25,000 and the interest rate is 22.5%,what is the value of the principal at the end of one year?

What is the nominal return?

Introduction to PFP

Beginning the Planning Process

Household Finance

Financial Statements Analysis

Cash Flow Planning

Debt

Non Financial Investments

Financial Investments

Risk Management

Other Insurance

Retirement Planning

Educational Planning

Tax Planning

Estate Planning

Stocks, Bonds and Mutual Funds

Background Topics

Capital Needs Analysis

Behavioral Financial Planning

Modern Investment Theory

Employee Benefits

Behavioral Finance-Applications

Comprehensive Financial Plan-Dan and Laura

Examining Financial Regulation and Ethics

Filters

Exam 2: Time Value of Money

If the value of the principal today is $12,000 and the interest rate is 10.5%,what is the total compounding contribution at the end of two years?

The present value of a sum is:

If the value of the principal today is $10,250 and the interest rate is 1.5%,what is the value of the principal at the end of three years?

What is the future value of $25,000 invested today for the next 22 years if the interest rate is 17.5 percent?

What is the future value of $15,000 invested today for the next 7 years if the interest rate is 17.5 percent,and the interest rate is compounded 12 times per year?

Approximately how long will it take for an investment to double in value if the interest rate is 10.5%?

What is a perpetual annuity?

What is the internal rate of return?

If the value of the principal today is $17,567 and the interest rate is 0.93%,what is the total simple interest income at the end of fifteen years?

A client has taken out a $300,000 loan,which must be repaid with equal annual payments for the next 30 years.If the interest rate on the loan is 4.5%,what are the annual payments?

If the value of the principal today is $10,000 and the interest rate is 21.22%,what is the total compound interest income at the end of six years?

What is the present value of $100,500 to be received 23 years from now if the interest rate is 7.5 percent?

The APR:

If the value of the principal today is $25,000 and the interest rate is 22.5%,what is the value of the principal at the end of one year?

What is the nominal return?

Introduction to PFP

Beginning the Planning Process

Household Finance

Financial Statements Analysis

Cash Flow Planning

Debt

Non Financial Investments

Financial Investments

Risk Management

Other Insurance

Retirement Planning

Educational Planning

Tax Planning

Estate Planning

Stocks, Bonds and Mutual Funds

Background Topics

Capital Needs Analysis

Behavioral Financial Planning

Modern Investment Theory

Employee Benefits

Behavioral Finance-Applications

Comprehensive Financial Plan-Dan and Laura

Examining Financial Regulation and Ethics

Filters