Question 1

The effective rate of interest and compounding frequency have an inverse relation.

Accepted Answer

A) True 
 B)False

Question 2

Raymond has an investment of $25 000 now,and in three years it will mature and pay Raymond $32 000.What is the approximate annual interest rate he will receive?

Accepted Answer

A) 9)3 percent 
B) 8)6 percent 
C) 8)9 percent 
D) Insufficient information to calculate this question 
A) 9)3 percent 
B) 8)6 percent 
C) 8)9 percent 
D) Insufficient information to calculate this question

Question 3

The higher the interest rate,the higher the present value,other things being equal.

Accepted Answer

A) True 
 B)False

Question 4

Sally will not be making any investments for five years as she is paying off student loans.In five years,she will make regular monthly investments,at the beginning of every month,in the amount of $350.She will make these investments for 25 years.What is the present value of her investment account assuming she can earn an annual return of 8.5%?

Accepted Answer

A) $229,725 
B) $345,428 
C) $519,405 
D) $313,250 
A) $229,725 
B) $345,428 
C) $519,405 
D) $313,250

Question 5

Nick invests $50 000 today and the fund guarantees an ordinary annuity of $12 345 for six years.What is the approximate rate of return?

Accepted Answer

A) 11.6 percent 
B) 8)0 percent 
C) 12.5 percent 
D) Insufficient information to calculate 
A) 11.6 percent 
B) 8)0 percent 
C) 12.5 percent 
D) Insufficient information to calculate

Question 6

If you could choose any of the following interest rates for your investment which would you choose to give you the highest return?

Accepted Answer

A) 15% compounded annually 
B) 14% compounded semi-annually 
C) 14% compounded quarterly 
D) 14% compounded monthly 
A) 15% compounded annually 
B) 14% compounded semi-annually 
C) 14% compounded quarterly 
D) 14% compounded monthly

The effective rate of interest and compounding frequency have an inverse relation.

Raymond has an investment of $25 000 now,and in three years it will mature and pay Raymond $32 000.What is the approximate annual interest rate he will receive?

The higher the interest rate,the higher the present value,other things being equal.

Nick invests $50 000 today and the fund guarantees an ordinary annuity of $12 345 for six years.What is the approximate rate of return?

If you could choose any of the following interest rates for your investment which would you choose to give you the highest return?

Tools for Financial Planning - Planning with Personal Financial Statements

Tools for Financial Planning - Using Tax Concepts for Planning

Managing Your Financial Resources - Banking Services and Managing Your Money

Managing Your Financial Resources - Assessing,Managing and Securing Your Credit

Managing Your Financial Resources - Purchasing and Financing a Home

Protecting Your Wealth - Auto and Homeowner's Insurance

Protecting Your Wealth - Health and Life Insurance

Personal Investing - Investing Fundamentals

Personal Investing - Investing in Stocks

Personal Investing - Investing in Bonds

Personal Investing - Investing in Mutual Funds

Retirement and Estate Planning - Retirement Planning

Retirement and Estate Planning - Estate Planning

Synthesis of Financial Planning - Integrating the Components of a Financial Plan

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Exam 1: Tools for Financial Planning - Applying Time Value Concepts

The effective rate of interest and compounding frequency have an inverse relation.

Raymond has an investment of $25 000 now,and in three years it will mature and pay Raymond $32 000.What is the approximate annual interest rate he will receive?

The higher the interest rate,the higher the present value,other things being equal.

Nick invests $50 000 today and the fund guarantees an ordinary annuity of $12 345 for six years.What is the approximate rate of return?

If you could choose any of the following interest rates for your investment which would you choose to give you the highest return?

Tools for Financial Planning - Planning with Personal Financial Statements

Tools for Financial Planning - Using Tax Concepts for Planning

Managing Your Financial Resources - Banking Services and Managing Your Money

Managing Your Financial Resources - Assessing,Managing and Securing Your Credit

Managing Your Financial Resources - Purchasing and Financing a Home

Protecting Your Wealth - Auto and Homeowner's Insurance

Protecting Your Wealth - Health and Life Insurance

Personal Investing - Investing Fundamentals

Personal Investing - Investing in Stocks

Personal Investing - Investing in Bonds

Personal Investing - Investing in Mutual Funds

Retirement and Estate Planning - Retirement Planning

Retirement and Estate Planning - Estate Planning

Synthesis of Financial Planning - Integrating the Components of a Financial Plan

Filters