Question 1

Kathy borrows $10,000 from the bank. For a four year loan, the bank requires annual end-of-year payments of $3,223.73. The annual interest rate on the loan is

Accepted Answer

A)  11 percent. 
B)  10 percent. 
C)  9 percent. 
D)  12 percent. 
A)  11 percent. 
B)  10 percent. 
C)  9 percent. 
D)  12 percent.

Question 2

Gina has planned to start her college education four years from now. To pay for her college education, she has decided to save $1,000 a quarter for the next four years in a bank account paying12 percent compounded quarterly. How much will she have at the end of the fourth year?

Accepted Answer

A)  $1,574 
B)  $16,000 
C)  $20,157 
D)  $19,116 
A)  $1,574 
B)  $16,000 
C)  $20,157 
D)  $19,116

Question 3

Bill plans to fund his registered retirement savings plan (RRSP) with a contribution of $2,000 at the end of each year for the next 20 years. If Bill can earn 12 percent on his contributions, how much will he have at the end of the twentieth year?

Accepted Answer

A)  $19,292 
B)  $14,938 
C)  $144,105 
D)  $40,000 
A)  $19,292 
B)  $14,938 
C)  $144,105 
D)  $40,000

Question 4

A deposit of $400 at the end of each month invested at 6% compounded monthly will grow to$277,198 in 25 years.

Accepted Answer

A) True 
 B)False

Question 5

Your Toronto Dominion shares you purchased 5 years ago for $20 are worth $34 today. The annualgrowth in share price has been 11.2%.

Accepted Answer

A) True 
 B)False

Question 6

For a given interest rate, as the length of time until receipt of the funds increases, the present value interest factor

Accepted Answer

A)  remains unchanged. 
B)  changes proportionally. 
C)  decreases. 
D)  increases. 
A)  remains unchanged. 
B)  changes proportionally. 
C)  decreases. 
D)  increases.

Question 7

Janice would like to send her parents on a cruise for their 25th wedding anniversary. She has priced the cruise at $15,000 and she has 5 years to accumulate this money. How much must Janice deposit annually in an account paying 10 percent interest in order to have enough money to send her parents on the cruise?

Accepted Answer

A)  $2,234 
B)  $2,457 
C)  $1,862 
D)  $3,000 
A)  $2,234 
B)  $2,457 
C)  $1,862 
D)  $3,000

Question 8

The time value concept/calculation used in amortizing a loan is the

Accepted Answer

A)  present value of a dollar. 
B)  future value of a dollar. 
C)  future value of an annuity. 
D)  present value of an annuity. 
A)  present value of a dollar. 
B)  future value of a dollar. 
C)  future value of an annuity. 
D)  present value of an annuity.

Question 9

The future value of $100 received today and deposited in an account for four years paying semiannual interest of 6 percent is________ .

Accepted Answer

A)  $134 
B)  $126 
C)  $889 
D)  $450 
A)  $134 
B)  $126 
C)  $889 
D)  $450

Question 10

A college received a contribution to its endowment fund of $2 million. They can never touch the principal, but they can use the earnings. At an assumed interest rate of 9.5 percent, how much can the college earn to help its operations each year?

Accepted Answer

A)  $95,000 
B)  $18,000 
C)  $19,000 
D)  $190,000 
A)  $95,000 
B)  $18,000 
C)  $19,000 
D)  $190,000

Question 11

The present value of $1,000 received at the end of year 1, $1,200 received at the end of year 2, and$1,300 received at the end of year 3, assuming an opportunity cost of 7 percent, is________ .

Accepted Answer

A)  $2,500 
B)  $6,516 
C)  $2,856 
D)  $3,043 
A)  $2,500 
B)  $6,516 
C)  $2,856 
D)  $3,043

Question 12

To pay for her college education, Gina is saving $2,000 at the beginning of each year for the nexteight years in a bank account paying 12 percent interest. How much will Gina have in that accountat the end of 8th year?

Accepted Answer

A)  $24,600 
B)  $27,552 
C)  $16,000 
D)  $17,920 
A)  $24,600 
B)  $27,552 
C)  $16,000 
D)  $17,920

Kathy borrows $10,000 from the bank. For a four year loan, the bank requires annual end-of-year payments of $3,223.73. The annual interest rate on the loan is

Gina has planned to start her college education four years from now. To pay for her college education, she has decided to save $1,000 a quarter for the next four years in a bank account paying12 percent compounded quarterly. How much will she have at the end of the fourth year?

Bill plans to fund his registered retirement savings plan (RRSP) with a contribution of $2,000 at the end of each year for the next 20 years. If Bill can earn 12 percent on his contributions, how much will he have at the end of the twentieth year?

A deposit of $400 at the end of each month invested at 6% compounded monthly will grow to$277,198 in 25 years.

Your Toronto Dominion shares you purchased 5 years ago for $20 are worth $34 today. The annualgrowth in share price has been 11.2%.

For a given interest rate, as the length of time until receipt of the funds increases, the present value interest factor

The time value concept/calculation used in amortizing a loan is the

The future value of $100 received today and deposited in an account for four years paying semiannual interest of 6 percent is________ .

A college received a contribution to its endowment fund of $2 million. They can never touch the principal, but they can use the earnings. At an assumed interest rate of 9.5 percent, how much can the college earn to help its operations each year?

The present value of $1,000 received at the end of year 1, $1,200 received at the end of year 2, and$1,300 received at the end of year 3, assuming an opportunity cost of 7 percent, is________ .

To pay for her college education, Gina is saving $2,000 at the beginning of each year for the nexteight years in a bank account paying 12 percent interest. How much will Gina have in that accountat the end of 8th year?

Overview of Corporate Finance

Financial Statements, Cash Flows, and Taxes

Financial Statement Analysis

Financial Planning and Forecasting

Financial Markets, Institutions, and Securities

Risk and Return

Valuation of Financial Securities

The Cost of Capital

Leverage and Capital Structure

Dividend Policy

Capital Budgeting: Principles and Techniques

Dealing With Project Risk and Other Topics in Capital Budgeting

Working Capital and Management of Current Assets

Management of Current Liabilities

Lease Financing: Concepts and Techniques

Corporate Securities, Derivatives, and Swaps

Mergers and Acquisitions, and Business Failure

International Corporate Finance

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Exam 6: Time Value of Money

Kathy borrows $10,000 from the bank. For a four year loan, the bank requires annual end-of-year payments of $3,223.73. The annual interest rate on the loan is

Gina has planned to start her college education four years from now. To pay for her college education, she has decided to save $1,000 a quarter for the next four years in a bank account paying12 percent compounded quarterly. How much will she have at the end of the fourth year?

Bill plans to fund his registered retirement savings plan (RRSP) with a contribution of $2,000 at the end of each year for the next 20 years. If Bill can earn 12 percent on his contributions, how much will he have at the end of the twentieth year?

A deposit of $400 at the end of each month invested at 6% compounded monthly will grow to$277,198 in 25 years.

Your Toronto Dominion shares you purchased 5 years ago for $20 are worth $34 today. The annualgrowth in share price has been 11.2%.

For a given interest rate, as the length of time until receipt of the funds increases, the present value interest factor

The time value concept/calculation used in amortizing a loan is the

The future value of $100 received today and deposited in an account for four years paying semiannual interest of 6 percent is________ .

A college received a contribution to its endowment fund of $2 million. They can never touch the principal, but they can use the earnings. At an assumed interest rate of 9.5 percent, how much can the college earn to help its operations each year?

The present value of $1,000 received at the end of year 1, $1,200 received at the end of year 2, and$1,300 received at the end of year 3, assuming an opportunity cost of 7 percent, is________ .

To pay for her college education, Gina is saving $2,000 at the beginning of each year for the nexteight years in a bank account paying 12 percent interest. How much will Gina have in that accountat the end of 8th year?

Overview of Corporate Finance

Financial Statements, Cash Flows, and Taxes

Financial Statement Analysis

Financial Planning and Forecasting

Financial Markets, Institutions, and Securities

Risk and Return

Valuation of Financial Securities

The Cost of Capital

Leverage and Capital Structure

Dividend Policy

Capital Budgeting: Principles and Techniques

Dealing With Project Risk and Other Topics in Capital Budgeting

Working Capital and Management of Current Assets

Management of Current Liabilities

Lease Financing: Concepts and Techniques

Corporate Securities, Derivatives, and Swaps

Mergers and Acquisitions, and Business Failure

International Corporate Finance

Filters