Question 1

In compound interest calculations,as the frequency of compounding increases,the:

Accepted Answer

A) total amount of interest decreases 
B) annual interest rate increases 
C) total amount of interest increases 
D) the interest rate decreases 
A) total amount of interest decreases 
B) annual interest rate increases 
C) total amount of interest increases 
D) the interest rate decreases

Question 2

Terry Lampron wishes to make 8 annual withdrawals of $3,000 each beginning on May 1,2011.Assuming a 4% interest rate,on May 1,2010,Lampron must deposit an amount of money equal to:

Accepted Answer

A) $20,198.23 
B) $27,642.60 
C) $26,192.10 
D) $ 9,936.30 
A) $20,198.23 
B) $27,642.60 
C) $26,192.10 
D) $ 9,936.30

Question 3

Bobby Bell has $500,000 and is considering investing in a project that would yield the following returns one year from today:   The expected rate of return for this investment is:

Accepted Answer

A) 11.4% 
B) 9% 
C) 3.4% 
D) 6.4% 
A) 11.4% 
B) 9% 
C) 3.4% 
D) 6.4%

Question 4

Kelly Smith deposited $8,500 in an account which pays interest at the rate of 8% compounded quarterly.At the end of 3 years,Smith will have:

Accepted Answer

A) $10,540.00 
B) $10,780.05 
C) $ 6,747.30 
D) $10,707.45 
A) $10,540.00 
B) $10,780.05 
C) $ 6,747.30 
D) $10,707.45

Question 5

How will the present value of a future amount be affected if the number of compounding increases?

Accepted Answer

A) The present value will increase 
B) The present value will decrease 
C) The present value will not change 
D) Must know the amount of the future value before this can be answered 
A) The present value will increase 
B) The present value will decrease 
C) The present value will not change 
D) Must know the amount of the future value before this can be answered

Question 6

Your client is 25 years old and wants to start receiving payments of $100,000 per year when she retires on her 60th birthday until her 89th birthday.As her financial advisor,how much must she invest every year staring today to achieve her goal if she can earn 7 percent annual interest?

Accepted Answer

Present value of annuity to ag

Question 7

Sinclair Corporation wants to know how much it should deposit each month in order to have $1,000,000 in five years.What type of problem is this?

Accepted Answer

A) present value of an annuity 
B) present value of an amount 
C) future value of an amount 
D) future value of an annuity 
A) present value of an annuity 
B) present value of an amount 
C) future value of an amount 
D) future value of an annuity

Question 8

Yar Ebadi lost $5,000 on an investment which represented a 10% negative rate of return after one year.How much did Yar invest?

Accepted Answer

A) $55,000 
B) $45,000 
C) $50,000 
D) Can not be determined given the information available 
A) $55,000 
B) $45,000 
C) $50,000 
D) Can not be determined given the information available

Question 9

Bobby Bell has $500,000 and is considering investing in a project that would yield the following returns one year from today:   The expected return for this investment is:

Accepted Answer

A) $57,000 
B) $45,000 
C) $17,000 
D) $32,000 
A) $57,000 
B) $45,000 
C) $17,000 
D) $32,000

Question 10

Dan Short invested $7,000 on October 1,2009,and in return he received a total of $6,200,which he collected on October 1,2010.The rate of return on Dan's investment was:

Accepted Answer

A) (12.9%) 
B) 12.9% 
C) 11.4% 
D) (11.4%) 
A) (12.9%) 
B) 12.9% 
C) 11.4% 
D) (11.4%)

Question 11

When an investment loses money,the amount of money lost is called?

Accepted Answer

A) A return on investment 
B) A return of investment 
C) An investment risk 
D) An investment casualty 
A) A return on investment 
B) A return of investment 
C) An investment risk 
D) An investment casualty

Question 12

Frank Gatta invested $15,0000 in a bank account.If Gatta makes no withdrawals,how
much will Gatta have in the bank account balance after 7 years under each of the
following circumstances?
A.Earns 4% compounded annually
B.Earns 4% compounded monthly
C.Earns 6% compounded monthly

Accepted Answer

A.PV = $15,000; r = 4%; c = 1;

Question 13

Ivan Valentine made $4,000 on an investment which yielded an 8% return after 1 year. How much did Ivan invest?

Accepted Answer

A) $40,000 
B) $50,000 
C) $60,000 
D) $70,000 
A) $40,000 
B) $50,000 
C) $60,000 
D) $70,000

Question 14

The present value on April 1,2010 of 16 semiannual payments of $5,000 each,with the first payment to be made on October 1,2010,assuming an 8% interest rate compounded semiannually is:

Accepted Answer

Present value of an

Question 15

Steve MacIntosh would like to have $20,000 in 5 years time to start his own business.The amount that MacIntosh would have to invest today,assuming an interest rate of 8% compounded quarterly,in order to reach his goal is:

Accepted Answer

A) $13,612.00 
B) $29,386.00 
C) $79,854.00 
D) $13,459.43 
A) $13,612.00 
B) $29,386.00 
C) $79,854.00 
D) $13,459.43

Question 16

If you are loaning money,which of the following would you prefer?

Accepted Answer

A) interest compounded semiannually 
B) interest compounded quarterly 
C) interest compounded monthly 
D) simple interest 
A) interest compounded semiannually 
B) interest compounded quarterly 
C) interest compounded monthly 
D) simple interest

Question 17

How will the present value of a future amount be affected if the interest rate is lowered.

Accepted Answer

A) The present value will increase 
B) The present value will decrease 
C) The present value will not change 
D) Must know the amount of the future value before this can be answered 
A) The present value will increase 
B) The present value will decrease 
C) The present value will not change 
D) Must know the amount of the future value before this can be answered

Question 18

Explain how inflation risk,business risk,and liquidity risk impact investment decisions.

Accepted Answer

Inflation risk is the chance that inflat

Question 19

You have just purchased a new BMW for $40,000 to determine your monthly payments which of the following would you use?

Accepted Answer

A) future value of an annuity of $1 per period 
B) present value of an annuity of $1 per period 
C) future value of the amount of $1 at compound interest 
D) present value of the amount of $1 at compound interest 
A) future value of an annuity of $1 per period 
B) present value of an annuity of $1 per period 
C) future value of the amount of $1 at compound interest 
D) present value of the amount of $1 at compound interest

Question 20

Central Metals,Inc.is considering investing in a silver mine.An investment of $500,000 would be made for one year with the following potential outcomes:
   The expected rate of return for this investment is:

Accepted Answer

Expected rate of ret

In compound interest calculations,as the frequency of compounding increases,the:

Terry Lampron wishes to make 8 annual withdrawals of $3,000 each beginning on May 1,2011.Assuming a 4% interest rate,on May 1,2010,Lampron must deposit an amount of money equal to:

Bobby Bell has $500,000 and is considering investing in a project that would yield the following returns one year from today: The expected rate of return for this investment is:

Kelly Smith deposited $8,500 in an account which pays interest at the rate of 8% compounded quarterly.At the end of 3 years,Smith will have:

How will the present value of a future amount be affected if the number of compounding increases?

Your client is 25 years old and wants to start receiving payments of $100,000 per year when she retires on her 60^th birthday until her 89^th birthday.As her financial advisor,how much must she invest every year staring today to achieve her goal if she can earn 7 percent annual interest?

Sinclair Corporation wants to know how much it should deposit each month in order to have $1,000,000 in five years.What type of problem is this?

Yar Ebadi lost $5,000 on an investment which represented a 10% negative rate of return after one year.How much did Yar invest?

Bobby Bell has $500,000 and is considering investing in a project that would yield the following returns one year from today: The expected return for this investment is:

Dan Short invested $7,000 on October 1,2009,and in return he received a total of $6,200,which he collected on October 1,2010.The rate of return on Dan's investment was:

When an investment loses money,the amount of money lost is called?

Frank Gatta invested $15,0000 in a bank account.If Gatta makes no withdrawals,how much will Gatta have in the bank account balance after 7 years under each of the following circumstances? A.Earns 4% compounded annually B.Earns 4% compounded monthly C.Earns 6% compounded monthly

Ivan Valentine made $4,000 on an investment which yielded an 8% return after 1 year. How much did Ivan invest?

The present value on April 1,2010 of 16 semiannual payments of $5,000 each,with the first payment to be made on October 1,2010,assuming an 8% interest rate compounded semiannually is:

Steve MacIntosh would like to have $20,000 in 5 years time to start his own business.The amount that MacIntosh would have to invest today,assuming an interest rate of 8% compounded quarterly,in order to reach his goal is:

If you are loaning money,which of the following would you prefer?

How will the present value of a future amount be affected if the interest rate is lowered.

Explain how inflation risk,business risk,and liquidity risk impact investment decisions.

You have just purchased a new BMW for $40,000 to determine your monthly payments which of the following would you use?

Central Metals,Inc.is considering investing in a silver mine.An investment of $500,000 would be made for one year with the following potential outcomes: The expected rate of return for this investment is:

Accounting and Business

Business Processes and Accounting Information

Operating Processes: Planning and Control

Short-Term Decision Making

Strategic Planning Regarding Operating Processes

Planning, The Balanced Scorecard, and Budgeting

Accounting Information Systems

Purchasinghuman Resourcespayment Process: Recording and Evaluating Expenditure Process Activities

Recording and Evaluating Conversion Process Activities

Recording and Evaluating Revenue Process Activities

Planning Investments: Capital Budgeting

Planning Equity Financing

Planning Debt Financing

Recording and Evaluating Capital Resource Process Activities: Financing

Recording and Evaluating Capital Resource Process Activities: Investing

Company Performance: Profitability

Company Performance: Owners Equity and Financial Position

Company Performance: Cash Flows

Company Performance: Comprehensive Evaluation

Filters

Exam 11: Time Value of Money

In compound interest calculations,as the frequency of compounding increases,the:

Terry Lampron wishes to make 8 annual withdrawals of $3,000 each beginning on May 1,2011.Assuming a 4% interest rate,on May 1,2010,Lampron must deposit an amount of money equal to:

Bobby Bell has $500,000 and is considering investing in a project that would yield the following returns one year from today: The expected rate of return for this investment is:

Kelly Smith deposited $8,500 in an account which pays interest at the rate of 8% compounded quarterly.At the end of 3 years,Smith will have:

How will the present value of a future amount be affected if the number of compounding increases?

Your client is 25 years old and wants to start receiving payments of $100,000 per year when she retires on her 60th birthday until her 89th birthday.As her financial advisor,how much must she invest every year staring today to achieve her goal if she can earn 7 percent annual interest?

Sinclair Corporation wants to know how much it should deposit each month in order to have $1,000,000 in five years.What type of problem is this?

Yar Ebadi lost $5,000 on an investment which represented a 10% negative rate of return after one year.How much did Yar invest?

Bobby Bell has $500,000 and is considering investing in a project that would yield the following returns one year from today: The expected return for this investment is:

Dan Short invested $7,000 on October 1,2009,and in return he received a total of $6,200,which he collected on October 1,2010.The rate of return on Dan's investment was:

When an investment loses money,the amount of money lost is called?

Frank Gatta invested $15,0000 in a bank account.If Gatta makes no withdrawals,how much will Gatta have in the bank account balance after 7 years under each of the following circumstances? A.Earns 4% compounded annually B.Earns 4% compounded monthly C.Earns 6% compounded monthly

Ivan Valentine made $4,000 on an investment which yielded an 8% return after 1 year. How much did Ivan invest?

The present value on April 1,2010 of 16 semiannual payments of $5,000 each,with the first payment to be made on October 1,2010,assuming an 8% interest rate compounded semiannually is:

Steve MacIntosh would like to have $20,000 in 5 years time to start his own business.The amount that MacIntosh would have to invest today,assuming an interest rate of 8% compounded quarterly,in order to reach his goal is:

If you are loaning money,which of the following would you prefer?

How will the present value of a future amount be affected if the interest rate is lowered.

Explain how inflation risk,business risk,and liquidity risk impact investment decisions.

You have just purchased a new BMW for $40,000 to determine your monthly payments which of the following would you use?

Central Metals,Inc.is considering investing in a silver mine.An investment of $500,000 would be made for one year with the following potential outcomes: The expected rate of return for this investment is:

Accounting and Business

Business Processes and Accounting Information

Operating Processes: Planning and Control

Short-Term Decision Making

Strategic Planning Regarding Operating Processes

Planning, The Balanced Scorecard, and Budgeting

Accounting Information Systems

Purchasinghuman Resourcespayment Process: Recording and Evaluating Expenditure Process Activities

Recording and Evaluating Conversion Process Activities

Recording and Evaluating Revenue Process Activities

Planning Investments: Capital Budgeting

Planning Equity Financing

Planning Debt Financing

Recording and Evaluating Capital Resource Process Activities: Financing

Recording and Evaluating Capital Resource Process Activities: Investing

Company Performance: Profitability

Company Performance: Owners Equity and Financial Position

Company Performance: Cash Flows

Company Performance: Comprehensive Evaluation

Filters

Your client is 25 years old and wants to start receiving payments of $100,000 per year when she retires on her 60^th birthday until her 89^th birthday.As her financial advisor,how much must she invest every year staring today to achieve her goal if she can earn 7 percent annual interest?