Question 1

The secret to becoming a millionaire is to pay all your bills on time.

Accepted Answer

A) True 
 B)False

Question 2

If your parents deposited $5,000.00 into an account for you when you were born as part of a 529 college savings fund that grew at an average rate of 8% annually,how much will you have in your college savings fund on your 18th birthday?

Accepted Answer

A) $6,099.29 
B) $19,980.10 
C) $12,520.59 
D) $50,795.32

Question 3

You can use the future value interest factor (FVIF)table to calculate the future amount of a lump sum.

Accepted Answer

A) True 
 B)False

Question 4

The annual percentage yield (APY)is the effective monthly rate of return taking into account the effect of compounding interest.

Accepted Answer

A) True 
 B)False

Question 5

What two cities are currently producing coins for general circulation?

Accepted Answer

A) Denver and Philadelphia 
B) Philadelphia and San Francisco 
C) Denver and San Francisco 
D) Fort Worth and Washington,D.C.

Question 6

The APY earned on $10,000 at 12% interest compounded monthly over the course of one year is the same rate as if compounded daily.

Accepted Answer

A) True 
 B)False

Question 7

Therese made an investment of $1,000 into an account that pays a 10% annual interest rate which is compounded quarterly.At the end of the 12-month period,Therese earned $103.81 in interest on her $1,000 investment.She calculates her annual percentage yield (APY)to be 10.38%.This is an example of how interest is

Accepted Answer

A) compounded. 
B) the same as the annual percentage rate (APR). 
C) effected by the annual percentage yield (APY). 
D) part of the truth in savings act.

Question 8

Each dollar bill has a serial number starting with the letter of the district in which it was printed.

Accepted Answer

A) True 
 B)False

Question 9

The Truth in Savings Act

Accepted Answer

A) provides formulas so people can calculate the APY on investments. 
B) requires that banks must disclose the fees,the APR,and the APY on interest-bearing accounts. 
C) requires that banks must disclose the fees,the APR,and the APY on loans. 
D) provides formulas so people can calculate the APY on loans.

Question 10

Currently,which two U.S.cities produce coins for circulation?

Accepted Answer

A) New York and Washington,D.C. 
B) Atlanta and Seattle 
C) Philadelphia and Denver 
D) Boston and Houston

Question 11

What is compounding of interest?

Accepted Answer

A) The initial deposit 
B) Money in a savings account 
C) Interest found in a savings account 
D) Interest on interest added to an initial deposit

Question 12

What is the difference between an annuity and an annuity due?

Accepted Answer

A) There are no payments in an annuity due. 
B) Payments are at the beginning of the month for an annuity and at the end of the month for an annuity due. 
C) Payments are at the beginning of the month for an annuity due and at the end of the month for an annuity. 
D) There is no difference.

Question 13

Which best describes compound interest?

Accepted Answer

A) Interest is added to a deposit 
B) Interest is added to your initial deposit and you earn interest on interest 
C) You pay double interest 
D) You pay two separate interest rates

Question 14

An ordinary annuity is a

Accepted Answer

A) stream of unequal payments that occurs at the end of a period. 
B) stream of equal payments that occurs at the end of a period. 
C) stream of equal payments that occurs at the beginning of a period. 
D) stream of unequal payments that occurs at the beginning of a period.

Question 15

Which of the following is the correct formula for computing your annual percentage yield?

Accepted Answer

A) APY = (1+ r/n)n - 1 
B) APY = (1- r/n)- 1 
C) APY = [(1- r)n] + 1 
D) APY = [(r - n)r] - 1

Exam 4: Time Value of Money

The secret to becoming a millionaire is to pay all your bills on time.

If your parents deposited $5,000.00 into an account for you when you were born as part of a 529 college savings fund that grew at an average rate of 8% annually,how much will you have in your college savings fund on your 18^th birthday?

You can use the future value interest factor (FVIF)table to calculate the future amount of a lump sum.

The annual percentage yield (APY)is the effective monthly rate of return taking into account the effect of compounding interest.

What two cities are currently producing coins for general circulation?

The APY earned on $10,000 at 12% interest compounded monthly over the course of one year is the same rate as if compounded daily.

Each dollar bill has a serial number starting with the letter of the district in which it was printed.

The Truth in Savings Act

Currently,which two U.S.cities produce coins for circulation?

What is compounding of interest?

What is the difference between an annuity and an annuity due?

Which best describes compound interest?

An ordinary annuity is a

Which of the following is the correct formula for computing your annual percentage yield?