Exam 5: Time Value of Money-The Basics

If you place $50 in a savings account with an interest rate of 7% compounded weekly,what will the investment be worth at the end of five years (round to the nearest dollar)?

You have $10,000 to invest.You do not want to take any risk,so you will put the funds in a savings account at the local bank.Of the following choices,which one will produce the largest sum at the end of 22 years?

If you deposit $1,000 each year in a savings account earning 4%,compounded annually,how much will you have in 10 years?

At what rate must $400 be compounded annually for it to grow to $716.40 in 10 years?

What will the dollar amount be in four years,assuming that interest is paid annually?

What is the annual compounded interest rate of an investment with a stated interest rate of 6% compounded quarterly for seven years (round to the nearest .1%)?

If you want to have $1,700 in seven years,how much money must you put in a savings account today? Assume that the savings account pays 6% and it is compounded quarterly (round to the nearest $10).

If you want to have $90 in four years,how much money must you put in a savings account today? Assume that the savings account pays 8.5% and it is compounded monthly (round to the nearest $1).

Which of the following provides the greatest annual interest?

To compound $100 quarterly for 20 years at 8%,we must use:

A friend plans to buy a big-screen TV/entertainment system and can afford to set aside $1,320 toward the purchase today.If your friend can earn 5.0%,compounded yearly,how much can your friend spend in four years on the purchase? Round off to the nearest $1.

As the discount rate increases,the present value of future cash flows increases.