Exam 14: The Basic Tools of Finance: Present Value Measuring the Time Value of Money

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Melissa offers you $1,000 today or $1,500 in 5 years.You would prefer to take the $1,500 in 5 years if the interest rate is

(Multiple Choice)

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Question 81

Tim put $275 in the bank one year ago and forgot about it.Today,the bank sent Tim a statement indicating that he now has $294.25 in his account.What interest rate did Tim earn?

(Multiple Choice)

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Question 82

Imagine that someone offers you $100 today or $200 in 10 years.You would prefer to take the $100 today if the interest rate is

(Multiple Choice)

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Question 83

Toni deposited $250 into an account and one year later she had $272.50 in the account.What interest rate was paid on Toni's deposit?

(Multiple Choice)

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Question 84

Robert put $15,000 into an account with a fixed interest rate two years ago and now the account balance is $16,917.66.What rate of interest did Robert earn?

(Multiple Choice)

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Question 85

Your accountant tells you that if you can continue to earn the current interest rate on your balance of $500 for ten years,you will have about $983.58.If your accountant is correct,what is the current rate of interest?

(Multiple Choice)

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Question 86

If you put $1,000 in the bank today at an interest rate of 6% what is its value in two years?

(Multiple Choice)

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Question 87

Sometimes On Time (SOT)Airlines is considering buying a new jet.SOT would be more likely to buy a new jet if there were either

(Multiple Choice)

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Question 88

Lucretia puts $400 into an account when the interest rate is 10 percent.Later she checks her balance and finds it's worth about $708.62.How many years did she wait to check her balance?

(Multiple Choice)

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Question 89

A company that produces wallpaper is considering buying some new equipment that it expects will increase future profits.If the interest rate falls,then the present value of these future earnings

(Multiple Choice)

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Question 90

What is the future value of $375 at an interest rate of 3 percent one year from today?

(Multiple Choice)

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Question 91

On May 25,1980 three pals graduated from high school,pooled together $3,000 and put the money into an account promising to pay 8% for the next 30 years.On May 25,2010 they withdrew all the money from the account.To the nearest dollar,how much did they withdraw?

(Multiple Choice)

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Question 92

You could borrow $1,000 today from Bank A and repay the loan,with interest,by paying Bank A $1,060 one year from today.Or,you could borrow $1,500 today from Bank B and repay the loan,with interest,by paying Bank B $1,600 one year from today.Which of the following statements is correct?

(Multiple Choice)

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Question 93

Braden says that $400 saved for one year at 4 percent interest has a smaller future value than $400 saved for two years at 2 percent interest.Lefty says that the present value of $400 to be received one year from today if the interest rate is 4 percent exceeds the present value of $400 to be received two years from today if the interest rate is 2 percent.

(Multiple Choice)

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Question 94

Suppose you have a choice between receiving a lump-sum payment of $10,000 today or four annual payments of $2,750 (with the first payment today).Of the following,which is the lowest annual interest rate at which you would prefer the lump-sum payment over the four annual payments?

(Multiple Choice)

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Question 95

Sari puts $100 into an account with an interest rate of 10 percent.According to the rule of 70,about how much does she have at the end of 21 years?

(Multiple Choice)

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Question 96

At which interest rate is the present value of $80.25 one year from today equal to $75 today?

(Multiple Choice)

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Question 97

You deposit X dollars into a 3-year certificate of deposit that pays 4.75 percent annual interest.At the end of the 3 years you have $4,229.70.What number of dollars,X,did you deposit?

(Multiple Choice)

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Question 98

Felix deposited $500 into an account two years ago.The first year he earned 3 percent interest and the second year he earned 5 percent interest.How much money does Felix have in his account now?

(Multiple Choice)

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Question 99

On the Internet you find the following offers for opening an online account.Which of them is the best offer if you have $2,000 to save for two years?

(Multiple Choice)

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Question 100

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Exam 14: The Basic Tools of Finance: Present Value Measuring the Time Value of Money

Melissa offers you $1,000 today or $1,500 in 5 years.You would prefer to take the $1,500 in 5 years if the interest rate is

Tim put $275 in the bank one year ago and forgot about it.Today,the bank sent Tim a statement indicating that he now has $294.25 in his account.What interest rate did Tim earn?

Imagine that someone offers you $100 today or $200 in 10 years.You would prefer to take the $100 today if the interest rate is

Toni deposited $250 into an account and one year later she had $272.50 in the account.What interest rate was paid on Toni's deposit?

Robert put $15,000 into an account with a fixed interest rate two years ago and now the account balance is $16,917.66.What rate of interest did Robert earn?

Your accountant tells you that if you can continue to earn the current interest rate on your balance of $500 for ten years,you will have about $983.58.If your accountant is correct,what is the current rate of interest?

If you put $1,000 in the bank today at an interest rate of 6% what is its value in two years?

Sometimes On Time (SOT)Airlines is considering buying a new jet.SOT would be more likely to buy a new jet if there were either

Lucretia puts $400 into an account when the interest rate is 10 percent.Later she checks her balance and finds it's worth about $708.62.How many years did she wait to check her balance?

A company that produces wallpaper is considering buying some new equipment that it expects will increase future profits.If the interest rate falls,then the present value of these future earnings

What is the future value of $375 at an interest rate of 3 percent one year from today?

On May 25,1980 three pals graduated from high school,pooled together $3,000 and put the money into an account promising to pay 8% for the next 30 years.On May 25,2010 they withdrew all the money from the account.To the nearest dollar,how much did they withdraw?

You could borrow $1,000 today from Bank A and repay the loan,with interest,by paying Bank A $1,060 one year from today.Or,you could borrow $1,500 today from Bank B and repay the loan,with interest,by paying Bank B $1,600 one year from today.Which of the following statements is correct?

Suppose you have a choice between receiving a lump-sum payment of $10,000 today or four annual payments of $2,750 (with the first payment today).Of the following,which is the lowest annual interest rate at which you would prefer the lump-sum payment over the four annual payments?

Sari puts $100 into an account with an interest rate of 10 percent.According to the rule of 70,about how much does she have at the end of 21 years?

At which interest rate is the present value of $80.25 one year from today equal to $75 today?

You deposit X dollars into a 3-year certificate of deposit that pays 4.75 percent annual interest.At the end of the 3 years you have $4,229.70.What number of dollars,X,did you deposit?

Felix deposited $500 into an account two years ago.The first year he earned 3 percent interest and the second year he earned 5 percent interest.How much money does Felix have in his account now?

On the Internet you find the following offers for opening an online account.Which of them is the best offer if you have $2,000 to save for two years?

Ten Principles of Economics

Ten Principles of Economics: How People Make Decisions

Ten Principles of Economics: How People Interact

Ten Principles of Economics: How the Economy As a Whole Works

Ten Principles of Economics: Part A

Ten Principles of Economics: Part B

Thinking Like an Economist

Thinking Like an Economist: The Economist As Scientist

Thinking Like an Economist: The Economist As Policy Adviser

Thinking Like an Economist: Why Economists Disagree

Thinking Like an Economist: Lets Get Going

Thinking Like an Economist: Graphing a Brief Review

Thinking Like an Economist: Part A

Thinking Like an Economist: Part B

Interdependence and the Gains From Trade

Interdependence and the Gains From Trade: A Parable for the Modern Economy

Interdependence and the Gains From Trade: Comparative Advantage the Driving Force of Specialization

Interdependence and the Gains From Trade: Applications of Comparative Advantage

Interdependence and the Gains From Trade: Conclusion

Interdependence and the Gains From Trade: Part A

Interdependence and the Gains From Trade: Part B

The Market Forces of Supply and Demand

The Market Forces of Supply and Demand:Markets and Competition

The Market Forces of Supply and Demand: Demand

The Market Forces of Supply and Demand: Supply

The Market Forces of Supply and Demand: Supply and Demand Together

The Market Forces of Supply and DemandConclusion How Prices Allocate Resources

The Market Forces of Supply and Demand: Part A

The Market Forces of Supply and Demand: Part B

Elasticity and Its Applications

Elasticity and Its Applications: The Elasticity of Demand

Elasticity and Its Applications: The Elasticity of Supply

Elasticity and Its Applications: Three Applications of Supply,demand,and Elasticity

Elasticity and Its Applications: Part A

Elasticity and Its Applications: Part B

Supply Demand and Government Policies

Supply Demand and Government Policies: Controls on Prices

Supply Demand and Government Policies: Taxes

Supply Demand and Government Policies: Part A

Supply Demand and Government Policies: Part B

Consumers Producers and the Efficiency of Markets

Consumers Producers and the Efficiency of Markets: Consumer Surplus

Consumers Producers and the Efficiency of Markets: Producer Surplus

Consumers Producers and the Efficiency of Markets: Market Efficiency

Consumers Producers and the Efficiency of Markets: Conclusion Market Efficiency and Market Failure

Consumers Producers and the Efficiency of Markets: Part A

Consumers Producers and the Efficiency of Markets: Part B

Application the Cost of Taxation

Application the Cost of Taxation: The Deadweight Loss of Taxation

Application the Cost of Taxation: The Determinants of the Deadweight Loss

Application the Cost of Taxation: Deadweight Loss and Tax Revenue As Taxes Vary

Application the Cost of Taxation: Conclusion

Application the Cost of Taxation: Part A

Application the Cost of Taxation: Part B

Application International Trade

Application International Trade: The Determinants of Trade

Application International Trade: The Winners and Losers From Trade

Application International Trade: The Arguments for Restricting Trade

Application International Trade: Conclusion

Application International Trade: Part A