Question 1

Sam has a loan that requires a single payment of $4,000 at the end of three years.The loan's interest rate is 6%, compounded semiannually.How much did Sam borrow?

Accepted Answer

A) $3,358.40 
B) $4,000.00 
C) $3,660.40 
D) $4,776.40 
E) $3,350.00 
A) $3,358.40 
B) $4,000.00 
C) $3,660.40 
D) $4,776.40 
E) $3,350.00

Question 2

An annuity is a series of equal payments occurring at equal intervals.

Accepted Answer

A) True 
 B)False

Question 3

Explain the concept of the present value of a single amount.

Accepted Answer

The present value of a single

Question 4

What amount can you borrow if you make six quarterly payments of $4,000 at a 12 % annual rate of interest?

Accepted Answer

A) $24,838.00 
B) $21,668.80 
C) $31,049.00 
D) $40,000.00 
E) $44,800,00 
A) $24,838.00 
B) $21,668.80 
C) $31,049.00 
D) $40,000.00 
E) $44,800,00

Question 5

Explain the concept of the present value of an annuity.

Accepted Answer

The present value of an annuit

Question 6

Sandra has a savings account that is now $50,000.She started with $28,225 and earned interest at 10% compounded annually.It took five years to accumulate the $50,000.

Accepted Answer

A) True 
 B)False

Question 7

The number of periods in a present value calculation can only be expressed in years.

Accepted Answer

A) True 
 B)False

Question 8

A company has $50,000 today to invest in a fund that will earn 7%.How much will the fund contain at the end of eight years?

Accepted Answer

$50,000 x

Question 9

How long will it take an investment of $25,000 at 6% compounded annually to accumulate to a total of $35,462.50?

Accepted Answer

A) 4 years 
B) 5 years 
C) 6 years 
D) 2 years 
E) 10 years 
A) 4 years 
B) 5 years 
C) 6 years 
D) 2 years 
E) 10 years

Question 10

Big League Sports borrowed $883,212 and must make annual year-end payments of $120,000 each.If the applicable interest rate is 6%, how many years will it take Big League Sports to pay off the loan?

Accepted Answer

$883,212/$120,000 = 7.3601
Thi

Question 11

Explain the concept of the future value of an annuity.

Accepted Answer

The future value of an annuity

Question 12

A company is setting aside $21,354 today and wishes to have $30,000 at the end of three years for a down payment on a piece of property.What interest rate must the company earn?

Accepted Answer

$21,354/$30,000 = 0.7118
This is the pre

Question 13

Troy has $105,000 now.He has a loan of $175,000 that he must pay at the end of five years.He can invest his $105,000 at 10% interest compounded semiannually.Will Troy have enough to pay his loan at the end of the five years?

Accepted Answer

$105,000 x 1.6289 =

Question 14

The present value of $5,000 per year for three years at 12% compounded annually is $12,009.

Accepted Answer

A) True 
 B)False

Question 15

An individual is planning to set-up an education fund for her children.She plans to invest $10,000 annually at the end of each year.She expects to withdraw money from the fund at the end of 10 years and expects to earn an annual return of 8%.What will be the total value of the fund at the end of 10 years?

Accepted Answer

A) $ 46,320 
B) $ 67,107 
C) $100,000 
D) $144,870 
E) $215,890 
A) $ 46,320 
B) $ 67,107 
C) $100,000 
D) $144,870 
E) $215,890

Question 16

Jon Shear expects an investment of $25,000 to return $6,595 annually.His investment is earning 10% per year.How many annual payments will he receive?

Accepted Answer

A) Five payments 
B) Six payments 
C) Four payments 
D) Three payments 
E) More than six payments 
A) Five payments 
B) Six payments 
C) Four payments 
D) Three payments 
E) More than six payments

Question 17

A company is considering an investment that will return $20,000 at the end of each semiannual period for four years.If the company requires an annual return of 10%, what is the maximum amount it is willing to pay for this investment?

Accepted Answer

A) Not more than $63,398 
B) Not more than $126,796 
C) Not more than $80,000 
D) Not more than $129,264 
E) Not more than $160,000 
A) Not more than $63,398 
B) Not more than $126,796 
C) Not more than $80,000 
D) Not more than $129,264 
E) Not more than $160,000

Sam has a loan that requires a single payment of $4,000 at the end of three years.The loan's interest rate is 6%, compounded semiannually.How much did Sam borrow?

An annuity is a series of equal payments occurring at equal intervals.

Explain the concept of the present value of a single amount.

What amount can you borrow if you make six quarterly payments of $4,000 at a 12 % annual rate of interest?

Explain the concept of the present value of an annuity.

Sandra has a savings account that is now $50,000.She started with $28,225 and earned interest at 10% compounded annually.It took five years to accumulate the $50,000.

The number of periods in a present value calculation can only be expressed in years.

A company has $50,000 today to invest in a fund that will earn 7%.How much will the fund contain at the end of eight years?

How long will it take an investment of $25,000 at 6% compounded annually to accumulate to a total of $35,462.50?

Big League Sports borrowed $883,212 and must make annual year-end payments of $120,000 each.If the applicable interest rate is 6%, how many years will it take Big League Sports to pay off the loan?

Explain the concept of the future value of an annuity.

A company is setting aside $21,354 today and wishes to have $30,000 at the end of three years for a down payment on a piece of property.What interest rate must the company earn?

Troy has $105,000 now.He has a loan of $175,000 that he must pay at the end of five years.He can invest his $105,000 at 10% interest compounded semiannually.Will Troy have enough to pay his loan at the end of the five years?

The present value of $5,000 per year for three years at 12% compounded annually is $12,009.

Jon Shear expects an investment of $25,000 to return $6,595 annually.His investment is earning 10% per year.How many annual payments will he receive?

A company is considering an investment that will return $20,000 at the end of each semiannual period for four years.If the company requires an annual return of 10%, what is the maximum amount it is willing to pay for this investment?

Managerial Accounting Concepts and Principles

Job Order Costing and Analysis

Process Costing and Analysis

Activity-Based Costing and Analysis

Cost Behavior and Cost-Volume-Profit Analysis

Variable Costing and Performance Reporting

Master Budgets and Performance Planning

Flexible Budgets and Standard Costing

Performance Measurement and Responsibility Accounting

Relevant Costing for Managerial Decisions

Capital Budgeting and Investment Analysis

Reporting and Analyzing Cash Flows

Analyzing Financial Statements

Basic Accounting for Transactions

Accounting for Partnerships

Filters

Exam 14: Time Value of Money

Sam has a loan that requires a single payment of $4,000 at the end of three years.The loan's interest rate is 6%, compounded semiannually.How much did Sam borrow?

An annuity is a series of equal payments occurring at equal intervals.

Explain the concept of the present value of a single amount.

What amount can you borrow if you make six quarterly payments of $4,000 at a 12 % annual rate of interest?

Explain the concept of the present value of an annuity.

Sandra has a savings account that is now $50,000.She started with $28,225 and earned interest at 10% compounded annually.It took five years to accumulate the $50,000.

The number of periods in a present value calculation can only be expressed in years.

A company has $50,000 today to invest in a fund that will earn 7%.How much will the fund contain at the end of eight years?

How long will it take an investment of $25,000 at 6% compounded annually to accumulate to a total of $35,462.50?

Big League Sports borrowed $883,212 and must make annual year-end payments of $120,000 each.If the applicable interest rate is 6%, how many years will it take Big League Sports to pay off the loan?

Explain the concept of the future value of an annuity.

A company is setting aside $21,354 today and wishes to have $30,000 at the end of three years for a down payment on a piece of property.What interest rate must the company earn?

Troy has $105,000 now.He has a loan of $175,000 that he must pay at the end of five years.He can invest his $105,000 at 10% interest compounded semiannually.Will Troy have enough to pay his loan at the end of the five years?

The present value of $5,000 per year for three years at 12% compounded annually is $12,009.

Jon Shear expects an investment of $25,000 to return $6,595 annually.His investment is earning 10% per year.How many annual payments will he receive?

A company is considering an investment that will return $20,000 at the end of each semiannual period for four years.If the company requires an annual return of 10%, what is the maximum amount it is willing to pay for this investment?

Managerial Accounting Concepts and Principles

Job Order Costing and Analysis

Process Costing and Analysis

Activity-Based Costing and Analysis

Cost Behavior and Cost-Volume-Profit Analysis

Variable Costing and Performance Reporting

Master Budgets and Performance Planning

Flexible Budgets and Standard Costing

Performance Measurement and Responsibility Accounting

Relevant Costing for Managerial Decisions

Capital Budgeting and Investment Analysis

Reporting and Analyzing Cash Flows

Analyzing Financial Statements

Basic Accounting for Transactions

Accounting for Partnerships

Filters