Question 1

With zero inflation,a dollar received today is worth ____ a dollar received one year from now.

Accepted Answer

A) the same as 
B) more than 
C) less than 
D) There is not enough information provided to answer this question. 
A) the same as 
B) more than 
C) less than 
D) There is not enough information provided to answer this question. B

Question 2

A dollar in the future is worth more than a dollar today.

Accepted Answer

A) True 
 B)False  False

Question 3

Discounting is the process of calculating how much future sums of money are worth today.

Accepted Answer

A) True 
 B)False  True

Question 4

The process of determining how much a sum paid or received in the future is worth in the present is called

Accepted Answer

A) appraisal. 
B) valuing. 
C) discounting. 
D) dealing. 
E) inflating. 
A) appraisal. 
B) valuing. 
C) discounting. 
D) dealing. 
E) inflating.

Question 5

The value of a sum of money or an asset to be paid or received in the future is called the

Accepted Answer

A) rated value. 
B) present calculated value. 
C) future present value. 
D) present rated value. 
E) present discounted value. 
A) rated value. 
B) present calculated value. 
C) future present value. 
D) present rated value. 
E) present discounted value.

Question 6

The proper equation to use in calculating the present discounted value of a sum F received in two years and again in four years is

Accepted Answer

A)    
B)    
C)    
D)    
A)    
B)    
C)    
D)

Question 7

Suppose you win a million dollars in the state lottery.What is the present discounted value of your winnings if you are scheduled to receive $200,000 at the end of each year for the next five years,and the rate of interest is 5 percent?

Accepted Answer

@#IMG-DLM& = $190,476.19 + $18

Question 8

Find an expression for the present discounted value of
(A)$500 to be paid at the end of five years.
(B)$100 to be paid at the end of two years and $100 to be paid at the end of three years.
(C)$8 to be paid at the end of one year,$8 to be paid at the end of two years,and $80 to be paid at the end of three years.

Accepted Answer

The answer of Find an expression for the present discounted...

Question 9

The percentage rate used to calculate the value of a future sum is called the

Accepted Answer

A) discount rate. 
B) calculation rate. 
C) interest rate. 
D) future rate. 
E) present rate. 
A) discount rate. 
B) calculation rate. 
C) interest rate. 
D) future rate. 
E) present rate.

Question 10

The discount rate is commonly measured by the

Accepted Answer

A) stock market returns. 
B) rate of inflation. 
C) interest rate. 
D) unemployment rate. 
E) rate of economic growth. 
A) stock market returns. 
B) rate of inflation. 
C) interest rate. 
D) unemployment rate. 
E) rate of economic growth.

Question 11

The present discounted value is today's value of future payments.

Accepted Answer

A) True 
 B)False

Question 12

You are considering two work contracts,each of which lasts for five years.The two contracts are summarized in the following table.   Assume that you will be paid at the end of each year.Contract 1 includes a signing bonus of $5,000 to be paid at the beginning of year 1,whereas contract 2 does not include a signing bonus.If the interest rate is 5 percent,which is the better offer?

Accepted Answer

The present discounted value o

Question 13

Suppose a friend wants to borrow $500 and offers to pay you back over the next five years by paying $100 at the end of two years,$200 at the end of three years,$150 at the end of four years,and $125 at the end of five years.You want to at least break even over the five years,and you could earn 7 percent interest on the money if you kept it.Should you make the loan? (Hint: Calculate the present discounted value of the payments.Show your work.)

Accepted Answer

The answer of Suppose a friend wants to borrow $500...

Question 14

The present discounted value of a $35 payment with an interest rate of 12 percent received every year for three years is

Accepted Answer

A) $94.15. 
B) $84.06. 
C) $105.00. 
D) $24.91. 
A) $94.15. 
B) $84.06. 
C) $105.00. 
D) $24.91.

Question 15

The present discounted value of $75 to be received in two years with no interest is ____ when the interest rate is 8 percent.

Accepted Answer

A) $64.30 
B) $69.44 
C) $87.48 
D) $75 
E) $81 
A) $64.30 
B) $69.44 
C) $87.48 
D) $75 
E) $81

Question 16

Discounting implies that a given amount of money is worth more today than in the future.

Accepted Answer

A) True 
 B)False

Exam 34: Present Discounted Value

With zero inflation,a dollar received today is worth ____ a dollar received one year from now.

A dollar in the future is worth more than a dollar today.

Discounting is the process of calculating how much future sums of money are worth today.

The process of determining how much a sum paid or received in the future is worth in the present is called

The value of a sum of money or an asset to be paid or received in the future is called the

The proper equation to use in calculating the present discounted value of a sum F received in two years and again in four years is

Suppose you win a million dollars in the state lottery.What is the present discounted value of your winnings if you are scheduled to receive $200,000 at the end of each year for the next five years,and the rate of interest is 5 percent?

The percentage rate used to calculate the value of a future sum is called the

The discount rate is commonly measured by the

The present discounted value is today's value of future payments.

The present discounted value of a $35 payment with an interest rate of 12 percent received every year for three years is

The present discounted value of $75 to be received in two years with no interest is ____ when the interest rate is 8 percent.

Discounting implies that a given amount of money is worth more today than in the future.

The Central Idea

Observing and Explaining the Economy

The Supply and Demand Model

Subtleties of the Supply and Demand Model: Price Floors,price Ceilings,and Elasticity

The Demand Curve and the Behavior of Consumers

The Supply Curve and the Behavior of Firms

The Interaction of People in Markets

Costs and the Changes at Firms Over Time

The Rise and Fall of Industries

Monopoly

Product Differentiation, monopolistic Competition, and Oligopoly

Antitrust Policy and Regulation

Labor Markets

Taxes, transfers, and Income Distribution

Public Goods, externalities, and Government Behavior

Capital and Financial Markets

Macroeconomics: the Big Picture

Measuring the Production, income, and Spending of Nations

The Spending Allocation Model

Unemployment and Employment

Productivity and Economic Growth

Money and Inflation

The Nature and Causes of Economic Fluctuations

The Economic Fluctuations Model

Using the Economic Fluctuations Model

Fiscal Policy

Monetary Policy

Economic Growth and Globalization

International Trade

International Finance

Reading,understanding,and Creating Graphs

Consumer Theory With Indifference Curves

Producer Theory With Isoquants

The Miracle of Compound Growth

Deriving the Growth Accounting Formula

Deriving the Formula for the Keynesian Multiplier and the Forward-Looking Consumption Model

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