Question 1

What is the future value of $20,000 invested for 20 years at a nominal interest rate of 9 percent compounded continuously?

Accepted Answer

A) $112,088 
B) $120,993 
C) $108,894 
D) $147,781 
A) $112,088 
B) $120,993 
C) $108,894 
D) $147,781

Question 2

Determine the value of $10,000 at the end of 3 years invested at 8 percent assuming continuous compounding.

Accepted Answer

A) $12,712 
B) $12,400 
C) $32,460 
D) $12,600 
A) $12,712 
B) $12,400 
C) $32,460 
D) $12,600

Question 3

What is the effective interest rate if 10% is compounded continuously?

Accepted Answer

A) 10.52% 
B) 10.97% 
C) 11.06% 
D) 10.11% 
A) 10.52% 
B) 10.97% 
C) 11.06% 
D) 10.11%

Question 4

Jane deposited $1000 into a saving account paying 12% interest compounded continuously.After 45 years, how much money did she have in the account?

Accepted Answer

A) $25,759.09 
B) $157,896.32 
C) $221,406.42 
D) $257,895.78 
A) $25,759.09 
B) $157,896.32 
C) $221,406.42 
D) $257,895.78

Question 5

Jack invested $25,000 into an account paying 6% compounded continuously.In five years how much money will he have?

Accepted Answer

A) $92,190.45 
B) $215,905.42 
C) $65,871.15 
D) $33,746.47 
A) $92,190.45 
B) $215,905.42 
C) $65,871.15 
D) $33,746.47

Question 6

What continuously compounded effective rate of interest will yield the same present value of a future cash flow as an annual rate of interest of 8.25%?

Accepted Answer

A) 8.60% 
B) 7.93% 
C) 8.25% 
D) 7.70% 
A) 8.60% 
B) 7.93% 
C) 8.25% 
D) 7.70%

Question 7

First Texas National Bank is offering a one-year CD with a nominal rate of 9.5 percent.If compounding occurs continuously, what is the effective annual rate?

Accepted Answer

A) 9.97% 
B) 16.76% 
C) 9.66% 
D) 22.06% 
A) 9.97% 
B) 16.76% 
C) 9.66% 
D) 22.06%

Question 8

Calculate the effective annual rate if the nominal annual rate is 9 percent compounded continuously.

Accepted Answer

A) 9.74% 
B) 9.29% 
C) 9.42% 
D) 9.54% 
A) 9.74% 
B) 9.29% 
C) 9.42% 
D) 9.54%

What is the future value of $20,000 invested for 20 years at a nominal interest rate of 9 percent compounded continuously?

Determine the value of $10,000 at the end of 3 years invested at 8 percent assuming continuous compounding.

What is the effective interest rate if 10% is compounded continuously?

Jane deposited $1000 into a saving account paying 12% interest compounded continuously.After 45 years, how much money did she have in the account?

Jack invested $25,000 into an account paying 6% compounded continuously.In five years how much money will he have?

What continuously compounded effective rate of interest will yield the same present value of a future cash flow as an annual rate of interest of 8.25%?

First Texas National Bank is offering a one-year CD with a nominal rate of 9.5 percent.If compounding occurs continuously, what is the effective annual rate?

Calculate the effective annual rate if the nominal annual rate is 9 percent compounded continuously.

The Role and Objective of Financial Management

The Domestic and International Financial Marketplace

Evaluation of Financial Performance

Financial Planning and Forecasting

The Time Value of Money

Fixed-Income Securities: Characteristics and Valuation

Common Stock: Characteristics, Valuation, and Issuance

Analysis of Risk and Return

Capital Budgeting and Cash Flow Analysis

Capital Budgeting: Decision Criteria and Real Option Considerations

A: Capital Budgeting: Decision Criteria and Real Option Considerations

Capital Budgeting and Risk

The Cost of Capital, Capital Structure, and Dividend Policy

Capital Structure Concepts

Capital Structure Management in Practice

A: Capital Structure Management in Practice

Dividend Policy

Working Capital Management

The Management of Cash and Marketable Securities

The Management of Accounts Receivable and Inventories

Lease and Intermediate-Term Financing

Financing with Derivatives

A: Financing with Derivatives

Risk Management

International Financial Management

Corporate Restructuring

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Exam 5: A: The Time Value of Money

What is the future value of $20,000 invested for 20 years at a nominal interest rate of 9 percent compounded continuously?

Determine the value of $10,000 at the end of 3 years invested at 8 percent assuming continuous compounding.

What is the effective interest rate if 10% is compounded continuously?

Jane deposited $1000 into a saving account paying 12% interest compounded continuously.After 45 years, how much money did she have in the account?

Jack invested $25,000 into an account paying 6% compounded continuously.In five years how much money will he have?

What continuously compounded effective rate of interest will yield the same present value of a future cash flow as an annual rate of interest of 8.25%?

First Texas National Bank is offering a one-year CD with a nominal rate of 9.5 percent.If compounding occurs continuously, what is the effective annual rate?

Calculate the effective annual rate if the nominal annual rate is 9 percent compounded continuously.

The Role and Objective of Financial Management

The Domestic and International Financial Marketplace

Evaluation of Financial Performance

Financial Planning and Forecasting

The Time Value of Money

Fixed-Income Securities: Characteristics and Valuation

Common Stock: Characteristics, Valuation, and Issuance

Analysis of Risk and Return

Capital Budgeting and Cash Flow Analysis

Capital Budgeting: Decision Criteria and Real Option Considerations

A: Capital Budgeting: Decision Criteria and Real Option Considerations

Capital Budgeting and Risk

The Cost of Capital, Capital Structure, and Dividend Policy

Capital Structure Concepts

Capital Structure Management in Practice

A: Capital Structure Management in Practice

Dividend Policy

Working Capital Management

The Management of Cash and Marketable Securities

The Management of Accounts Receivable and Inventories

Lease and Intermediate-Term Financing

Financing with Derivatives

A: Financing with Derivatives

Risk Management

International Financial Management

Corporate Restructuring

Filters