Exam 5: Time Value of Moneythe Basics

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If you plotted the future value of $1000 growing at any interest rate greater than 0 with dollars on the vertical axis and time on the horizontal axis, the resulting curve would [blank].

(Multiple Choice)

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Question 61

The present value of $1000 to be received at the end of five years, if the discount rate is 10%, is [blank].

(Multiple Choice)

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Question 62

Jack Jones wants to buy a one-way bus ticket to Kings Canyon.The ticket costs $142, but Jack has only $80.If Jack puts the money in an account that pays 9% interest compounded monthly, how many months must Jack wait until he has $142 (round to the nearest month)?

(Multiple Choice)

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Question 63

Timelines can be expressed in terms of [blank].

(Multiple Choice)

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Question 64

What will the dollar amount be if the interest is compounded semi-annually for those four years?

(Multiple Choice)

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Question 65

The future value of a single sum [blank].

(Multiple Choice)

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Question 66

For any number of compounding periods per year greater than 1, EAR will always be greater than the APR.

(True/False)

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Question 67

When using a financial calculator, which of the following is a correct way to find the future value of $200 deposited today in an account for four years paying annual interest of 2% compounded quarterly?

(Multiple Choice)

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Question 68

You have been offered a credit card with an interest rate of 1.5% per month.This is equivalent to and effective annual rate (EAR)of [blank].

(Multiple Choice)

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Question 69

Timelines are always expressed in years.

(True/False)

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Question 70

As the number of compounding periods per year increase, the annual percentage rate of interest increases.

(True/False)

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Question 71

A timeline is a linear representation of the timing of cash flows.

(True/False)

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Question 72

Money has a greater time value [blank].

(Multiple Choice)

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Question 73

On a timeline, the present is represented as [blank].

(Multiple Choice)

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Question 74

Should you prefer to receive $100,000 right now or $10,000 at the end of each of the next 12 years?

(Multiple Choice)

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Question 75

Which of the following provides the greatest annual interest?

(Multiple Choice)

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Question 76

You bought a painting 10 years ago as an investment.You originally paid $85,000 for it.If you sold it for $484 050, what was your annual return on investment?

(Multiple Choice)

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Question 77

When using Excel to find the future value of $2,000 invested in an account that would earn interest of 7.5% for 18 years, the correct entry would be

(Multiple Choice)

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Question 78

Which of the following formulae represents the future value of $500 invested at 8% compounded quarterly for five years?

(Multiple Choice)

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Question 79

Which of the following is the formula for compound value?

(Multiple Choice)

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Question 80

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Exam 5: Time Value of Moneythe Basics

If you plotted the future value of $1000 growing at any interest rate greater than 0 with dollars on the vertical axis and time on the horizontal axis, the resulting curve would [blank].

The present value of $1000 to be received at the end of five years, if the discount rate is 10%, is [blank].

Jack Jones wants to buy a one-way bus ticket to Kings Canyon.The ticket costs $142, but Jack has only $80.If Jack puts the money in an account that pays 9% interest compounded monthly, how many months must Jack wait until he has $142 (round to the nearest month)?

Timelines can be expressed in terms of [blank].

What will the dollar amount be if the interest is compounded semi-annually for those four years?

The future value of a single sum [blank].

For any number of compounding periods per year greater than 1, EAR will always be greater than the APR.

When using a financial calculator, which of the following is a correct way to find the future value of $200 deposited today in an account for four years paying annual interest of 2% compounded quarterly?

You have been offered a credit card with an interest rate of 1.5% per month.This is equivalent to and effective annual rate (EAR)of [blank].

Timelines are always expressed in years.

As the number of compounding periods per year increase, the annual percentage rate of interest increases.

A timeline is a linear representation of the timing of cash flows.

Money has a greater time value [blank].

On a timeline, the present is represented as [blank].

Should you prefer to receive $100,000 right now or $10,000 at the end of each of the next 12 years?

Which of the following provides the greatest annual interest?

You bought a painting 10 years ago as an investment.You originally paid $85,000 for it.If you sold it for $484 050, what was your annual return on investment?

When using Excel to find the future value of $2,000 invested in an account that would earn interest of 7.5% for 18 years, the correct entry would be

Which of the following formulae represents the future value of $500 invested at 8% compounded quarterly for five years?

Which of the following is the formula for compound value?

Getting Startedprinciples of Finance

Firms and the Financial Market

Understanding Financial Statements, Taxes and Cash Flows

Financial Analysissizing up Firm Performance

The Time Value of Moneyannuities and Other Topics

Risk and Returnan Introduction: History of Financial Market Returns

Risk and Returncapital Market Theory

Debt Valuation and Interest Rates

Shares Valuation

Investment Decision Criteria

Analyzing Project Cash Flows

Risk Analysis and Project Evaluations

The Cost of Capital

Analysis and Impact of Leverage

Capital Structure Policy

Dividend and Share-Buyback Policy

Financial Forecasting and Planning

Working Capital Management

International Business Finance

Corporate Risk Management

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