Question 1

What is the value of $10,000 invested for 1 year at 8% compounded continuously?

Accepted Answer

A)  $10,800 
B)  $10,833 
C)  $10,824 
D)  $11,268 
A)  $10,800 
B)  $10,833 
C)  $10,824 
D)  $11,268

Question 2

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 6.15%?

Accepted Answer

A)  5.97% 
B)  6.32% 
C)  4.11% 
D)  8.24% 
A)  5.97% 
B)  6.32% 
C)  4.11% 
D)  8.24%

Question 3

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 4

Moneybag Bank & Trust is offering loans at 5% compounded continuously. Before you decide to borrow using that interest rate, what payment would be required on a $200,000 loan for a 30 year loan?

Accepted Answer

A)  $1,089.59 
B)  $1,578.34 
C)  $1,183.92 
D)  $1,226.90 
A)  $1,089.59 
B)  $1,578.34 
C)  $1,183.92 
D)  $1,226.90

Question 5

If interest is at 8% and it is compounded continuously, what is the effective interest rate?

Accepted Answer

A)  7.25% 
B)  5.14% 
C)  8.33% 
D)  9.76% 
A)  7.25% 
B)  5.14% 
C)  8.33% 
D)  9.76%

Question 6

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 7

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 8

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

What is the value of $10,000 invested for 1 year at 8% compounded continuously?

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 6.15%?

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

Moneybag Bank & Trust is offering loans at 5% compounded continuously. Before you decide to borrow using that interest rate, what payment would be required on a $200,000 loan for a 30 year loan?

If interest is at 8% and it is compounded continuously, what is the effective interest rate?

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?

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

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

Capital Budgeting and Risk

The Cost of Capital

Capital Structure Concepts

Capital Structure Management in Practice

Dividend Policy

Working Capital Policy and Short-term Financing

The Management of Cash and Marketable Securities

Management of Accounts Receivable and Inventories

Lease and Intermediate-term Financing

Financing With Derivatives

Risk Management

International Financial Management

Corporate Restructuring

Mutually Exclusive Investments Having Unequal Lives

Breakeven Analysis

Bond Refunding Analysis

Taxes

Filters

Exam 24: Continuous Compounding and Discounting

What is the value of $10,000 invested for 1 year at 8% compounded continuously?

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 6.15%?

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

Moneybag Bank & Trust is offering loans at 5% compounded continuously. Before you decide to borrow using that interest rate, what payment would be required on a $200,000 loan for a 30 year loan?

If interest is at 8% and it is compounded continuously, what is the effective interest rate?

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?

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

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

Capital Budgeting and Risk

The Cost of Capital

Capital Structure Concepts

Capital Structure Management in Practice

Dividend Policy

Working Capital Policy and Short-term Financing

The Management of Cash and Marketable Securities

Management of Accounts Receivable and Inventories

Lease and Intermediate-term Financing

Financing With Derivatives

Risk Management

International Financial Management

Corporate Restructuring

Mutually Exclusive Investments Having Unequal Lives

Breakeven Analysis

Bond Refunding Analysis

Taxes

Filters