Question 1

Kaeli Company will invest $10,000 on January 1. If the fund earns 10% compound interest, what amount will be in the fund at the end of 5 years?

Accepted Answer

A) $10,000 
B) $15,000 
C) $16,000 
D) $16,105

Question 2

Kaeli Company will invest $10,000 a year for 5 years, with all investments at the beginning of each year. If the fund earns 10% compound interest, what amount will be in the fund at the end of 5 years?

Accepted Answer

A) $60,000 
B) $61,051 
C) $65,000 
D) $67,156

Question 3

Cash payments of equal amounts, made at the beginning of each period, is called an

Accepted Answer

A) ordinary annuity. 
B) annuity in arrears. 
C) annuity due. 
D) installment series.

Question 4

Which of the following accounts did not rely on the calculation of present value or the implicit rate of interest in the determination of the balance sheet dollar value?

Accepted Answer

A) Capital Lease Equipment 
B) Long-term Notes Payable 
C) Additional Paid-in Capital 
D) Capital Lease Obligations

Question 5

Cora Company will receive $10,000 in 5 years. If the relevant interest rate is 10%, what is the present value of this receipt?

Accepted Answer

A) $ 5,000 
B) $ 6,209 
C) $ 7,500 
D) $10,000

Exam 15: The Time Value of Money

Kaeli Company will invest $10,000 on January 1. If the fund earns 10% compound interest, what amount will be in the fund at the end of 5 years?

Kaeli Company will invest $10,000 a year for 5 years, with all investments at the beginning of each year. If the fund earns 10% compound interest, what amount will be in the fund at the end of 5 years?

Cash payments of equal amounts, made at the beginning of each period, is called an

Which of the following accounts did not rely on the calculation of present value or the implicit rate of interest in the determination of the balance sheet dollar value?

Cora Company will receive $10,000 in 5 years. If the relevant interest rate is 10%, what is the present value of this receipt?