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Deck 26: Appendix B: Time Value of Money
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Question
Present Value of 1 
Future Value of 1 
Present Value of an Annuity of 1 
Future Value of an Annuity of 1 
Russell Company has acquired a building with a loan that requires payments of $20,000 every six months for 5 years.The annual interest rate on the loan is 12%.What is the present value of the building?
A)$72,096
B)$113,004
C)$147,202
D)$86,590
E)$200,000
Future Value of 1 Present Value of an Annuity of 1 Future Value of an Annuity of 1 Russell Company has acquired a building with a loan that requires payments of $20,000 every six months for 5 years.The annual interest rate on the loan is 12%.What is the present value of the building?A)$72,096
B)$113,004
C)$147,202
D)$86,590
E)$200,000
Question
Present Value of 1 
Future Value of 1 
Present Value of an Annuity of 1 
Future Value of an Annuity of 1 
If we want to know the value of present-day assets at a future date,we can use:
A)Present value computations.
B)Annuity computations.
C)Interest computations.
D)Future value computations.
E)Earnings computations.
Future Value of 1 Present Value of an Annuity of 1 Future Value of an Annuity of 1 If we want to know the value of present-day assets at a future date,we can use:A)Present value computations.
B)Annuity computations.
C)Interest computations.
D)Future value computations.
E)Earnings computations.
Question
Present Value of 1 
Future Value of 1 
Present Value of an Annuity of 1 
Future Value of an Annuity of 1 
What amount can you borrow if you make six quarterly payments of $4,000 at a 12% annual rate of interest?
A)$24,838.00
B)$21,668.80
C)$31,049.00
D)$40,000.00
E)$44,800.00
Future Value of 1 Present Value of an Annuity of 1 Future Value of an Annuity of 1 What amount can you borrow if you make six quarterly payments of $4,000 at a 12% annual rate of interest?A)$24,838.00
B)$21,668.80
C)$31,049.00
D)$40,000.00
E)$44,800.00
Question
Present Value of 1 
Future Value of 1 
Present Value of an Annuity of 1 
Future Value of an Annuity of 1 
The Masterson family is setting up a vacation fund,and they plan on depositing $1,000 per quarter in an investment that will pay 12% annual interest.What amount will they have available for their vacation at the end of 2 years?
A)$8,000.00
B)$8,960.00
C)$8,892.30
D)$8,240.00
E)$8,487.20
Future Value of 1 Present Value of an Annuity of 1 Future Value of an Annuity of 1 The Masterson family is setting up a vacation fund,and they plan on depositing $1,000 per quarter in an investment that will pay 12% annual interest.What amount will they have available for their vacation at the end of 2 years?A)$8,000.00
B)$8,960.00
C)$8,892.30
D)$8,240.00
E)$8,487.20
Question
Present Value of 1 
Future Value of 1 
Present Value of an Annuity of 1 
Future Value of an Annuity of 1 
Which interest rate column would you use from a present value or future value table for 8% interest compounded quarterly?
A)12%
B)6%
C)3%
D)2%
E)1%
Future Value of 1 Present Value of an Annuity of 1 Future Value of an Annuity of 1 Which interest rate column would you use from a present value or future value table for 8% interest compounded quarterly?A)12%
B)6%
C)3%
D)2%
E)1%
Question
Present Value of 1 
Future Value of 1 
Present Value of an Annuity of 1 
Future Value of an Annuity of 1 
Patricia wants to invest a sum of money today that will yield $10,000 at the end of 6 years.Assuming she can earn an interest rate of 6% compounded annually,how much must she invest today?
A)$7,050
B)$9,400
C)$6,000
D)$8,836
E)$8,306
Future Value of 1 Present Value of an Annuity of 1 Future Value of an Annuity of 1 Patricia wants to invest a sum of money today that will yield $10,000 at the end of 6 years.Assuming she can earn an interest rate of 6% compounded annually,how much must she invest today?A)$7,050
B)$9,400
C)$6,000
D)$8,836
E)$8,306
Question
Present Value of 1 
Future Value of 1 
Present Value of an Annuity of 1 
Future Value of an Annuity of 1 
A company is considering investing in a project that is expected to return $350,000 four years from now.How much is the company willing to pay for this investment if the company requires a 12% return?
A)$55,606
B)$137,681
C)$222,425
D)$265,764
E)$350,000
Future Value of 1 Present Value of an Annuity of 1 Future Value of an Annuity of 1 A company is considering investing in a project that is expected to return $350,000 four years from now.How much is the company willing to pay for this investment if the company requires a 12% return?A)$55,606
B)$137,681
C)$222,425
D)$265,764
E)$350,000
Question
Present Value of 1 
Future Value of 1 
Present Value of an Annuity of 1 
Future Value of an Annuity of 1 
An individual is planning to set-up an education fund for her daughter.She plans to invest $7,000 annually at the end of each year.She expects to withdraw money from the fund at the end of 9 years and expects to earn an annual return of 8%.What will be the total value of the fund at the end of 9 years?
A)$87,416
B)$68,040
C)$50,400
D)$126,000
E)$45,360
Future Value of 1 Present Value of an Annuity of 1 Future Value of an Annuity of 1 An individual is planning to set-up an education fund for her daughter.She plans to invest $7,000 annually at the end of each year.She expects to withdraw money from the fund at the end of 9 years and expects to earn an annual return of 8%.What will be the total value of the fund at the end of 9 years?A)$87,416
B)$68,040
C)$50,400
D)$126,000
E)$45,360
Question
Present Value of 1 
Future Value of 1 
Present Value of an Annuity of 1 
Future Value of an Annuity of 1 
A company needs to have $150,000 in 5 years,and will create a fund to insure that the $150,000 will be available.If it can earn a 6% return compounded annually,how much must the company invest in the fund today to equal the $150,000 at the end of 5 years?
A)$141,000
B)$112,095
C)$100,000
D)$45,000
E)$105,000
Future Value of 1 Present Value of an Annuity of 1 Future Value of an Annuity of 1 A company needs to have $150,000 in 5 years,and will create a fund to insure that the $150,000 will be available.If it can earn a 6% return compounded annually,how much must the company invest in the fund today to equal the $150,000 at the end of 5 years?A)$141,000
B)$112,095
C)$100,000
D)$45,000
E)$105,000
Question
Present Value of 1 
Future Value of 1 
Present Value of an Annuity of 1 
Future Value of an Annuity of 1 
Jason has a loan that requires a single payment of $4,000 at the end of 3 years.The loan's interest rate is 6%,compounded semiannually.How much did Jason borrow?
A)$3,358.40
B)$4,000.00
C)$3,660.40
D)$4,776.40
E)$3,350.00
Future Value of 1 Present Value of an Annuity of 1 Future Value of an Annuity of 1 Jason has a loan that requires a single payment of $4,000 at the end of 3 years.The loan's interest rate is 6%,compounded semiannually.How much did Jason borrow?A)$3,358.40
B)$4,000.00
C)$3,660.40
D)$4,776.40
E)$3,350.00
Question
Present Value of 1 
Future Value of 1 
Present Value of an Annuity of 1 
Future Value of an Annuity of 1 
What amount can you borrow if you make seven semiannual payments of $4,000 at an 8% annual rate of interest?
A)$28,000.00
B)$25,760.00
C)$31,049.00
D)$24,008.40
E)$35,691.20
Future Value of 1 Present Value of an Annuity of 1 Future Value of an Annuity of 1 What amount can you borrow if you make seven semiannual payments of $4,000 at an 8% annual rate of interest?A)$28,000.00
B)$25,760.00
C)$31,049.00
D)$24,008.40
E)$35,691.20
Question
Present Value of 1 
Future Value of 1 
Present Value of an Annuity of 1 
Future Value of an Annuity of 1 
Cody invests $1,800 per year from his summer wages at a 4% annual interest rate.He plans to take a European vacation at the end of 4 years when he graduates from college.How much will he have available to spend on his vacation?
A)$7,787.52
B)$7,488.00
C)$6,912.00
D)$7,200.00
E)$7,643.70
Future Value of 1 Present Value of an Annuity of 1 Future Value of an Annuity of 1 Cody invests $1,800 per year from his summer wages at a 4% annual interest rate.He plans to take a European vacation at the end of 4 years when he graduates from college.How much will he have available to spend on his vacation?A)$7,787.52
B)$7,488.00
C)$6,912.00
D)$7,200.00
E)$7,643.70
Question
Present Value of 1 
Future Value of 1 
Present Value of an Annuity of 1 
Future Value of an Annuity of 1 
Keisha has $3,500 now and plans on investing it in a fund that will pay her 12% interest compounded quarterly.How much will Keisha have accumulated after 2 years?
A)$4,433.80
B)$4,340.00
C)$4,390.40
D)$3,920.00
E)$3,500.00
Future Value of 1 Present Value of an Annuity of 1 Future Value of an Annuity of 1 Keisha has $3,500 now and plans on investing it in a fund that will pay her 12% interest compounded quarterly.How much will Keisha have accumulated after 2 years?A)$4,433.80
B)$4,340.00
C)$4,390.40
D)$3,920.00
E)$3,500.00
Question
Present Value of 1 
Future Value of 1 
Present Value of an Annuity of 1 
Future Value of an Annuity of 1 
Interest may be defined as:
A)Time.
B)A borrower's payment to the owner of an asset for its use.
C)The future value of a present amount.
D)Always a liability.
E)Always an asset.
Future Value of 1 Present Value of an Annuity of 1 Future Value of an Annuity of 1 Interest may be defined as:A)Time.
B)A borrower's payment to the owner of an asset for its use.
C)The future value of a present amount.
D)Always a liability.
E)Always an asset.
Question
Present Value of 1 
Future Value of 1 
Present Value of an Annuity of 1 
Future Value of an Annuity of 1 
Jessica received a gift of $7,500 at the time of her high school graduation.She invests it in an account that yields 10% compounded semi-annually.What will the value of Jessica's investment be at the end of 5 years?
A)$8,250.00
B)$11,250.00
C)$12,216.75
D)$9,375.00
E)$10,500.00
Future Value of 1 Present Value of an Annuity of 1 Future Value of an Annuity of 1 Jessica received a gift of $7,500 at the time of her high school graduation.She invests it in an account that yields 10% compounded semi-annually.What will the value of Jessica's investment be at the end of 5 years?A)$8,250.00
B)$11,250.00
C)$12,216.75
D)$9,375.00
E)$10,500.00
Question
Present Value of 1 
Future Value of 1 
Present Value of an Annuity of 1 
Future Value of an Annuity of 1 
An individual is planning to set-up an education fund for his grandchildren.He plans to invest $10,000 annually at the end of each year.He expects to withdraw money from the fund at the end of 10 years and expects to earn an annual return of 8%.What will be the total value of the fund at the end of 10 years?
A)$46,320
B)$67,107
C)$100,000
D)$144,870
E)$215,890
Future Value of 1 Present Value of an Annuity of 1 Future Value of an Annuity of 1 An individual is planning to set-up an education fund for his grandchildren.He plans to invest $10,000 annually at the end of each year.He expects to withdraw money from the fund at the end of 10 years and expects to earn an annual return of 8%.What will be the total value of the fund at the end of 10 years?A)$46,320
B)$67,107
C)$100,000
D)$144,870
E)$215,890
Question
Present Value of 1 
Future Value of 1 
Present Value of an Annuity of 1 
Future Value of an Annuity of 1 
Marc Lewis expects an investment of $25,000 to return $6,595 annually.His investment is earning 10% per year.How many annual payments will he receive?
A)Five payments
B)Six payments
C)Four payments
D)Three payments
E)More than six payments
Future Value of 1 Present Value of an Annuity of 1 Future Value of an Annuity of 1 Marc Lewis expects an investment of $25,000 to return $6,595 annually.His investment is earning 10% per year.How many annual payments will he receive?A)Five payments
B)Six payments
C)Four payments
D)Three payments
E)More than six payments
Question
Present Value of 1 
Future Value of 1 
Present Value of an Annuity of 1 
Future Value of an Annuity of 1 
Marshall has received an inheritance and wants to invest a sum of money today that will yield $5,000 at the end of each of the next 10 years.Assuming he can earn an interest rate of 5% compounded annually,how much of his inheritance must he invest today?
A)$50,000.00
B)$47,500.00
C)$45,125.00
D)$38,608.50
E)$100,000.00
Future Value of 1 Present Value of an Annuity of 1 Future Value of an Annuity of 1 Marshall has received an inheritance and wants to invest a sum of money today that will yield $5,000 at the end of each of the next 10 years.Assuming he can earn an interest rate of 5% compounded annually,how much of his inheritance must he invest today?A)$50,000.00
B)$47,500.00
C)$45,125.00
D)$38,608.50
E)$100,000.00
Question
Present Value of 1 
Future Value of 1 
Present Value of an Annuity of 1 
Future Value of an Annuity of 1 
A company is considering an investment that will return $22,000 semiannually at the end of each semiannual period for 4 years.If the company requires an annual return of 10%,what is the maximum amount it is willing to pay for this investment?
A)Not more than $69,738
B)Not more than $139,476
C)Not more than $88,000
D)Not more than $142,190
E)Not more than $176,000
Future Value of 1 Present Value of an Annuity of 1 Future Value of an Annuity of 1 A company is considering an investment that will return $22,000 semiannually at the end of each semiannual period for 4 years.If the company requires an annual return of 10%,what is the maximum amount it is willing to pay for this investment?A)Not more than $69,738
B)Not more than $139,476
C)Not more than $88,000
D)Not more than $142,190
E)Not more than $176,000
Question
Present Value of 1 
Future Value of 1 
Present Value of an Annuity of 1 
Future Value of an Annuity of 1 
Clara is setting up a retirement fund,and she plans on depositing $5,000 per year in an investment that will pay 7% annual interest.How long will it take her to reach her retirement goal of $69,080?
A)13.816 years
B)0.072 years
C)10 years
D)20 years
E)5 years
Future Value of 1 Present Value of an Annuity of 1 Future Value of an Annuity of 1 Clara is setting up a retirement fund,and she plans on depositing $5,000 per year in an investment that will pay 7% annual interest.How long will it take her to reach her retirement goal of $69,080?A)13.816 years
B)0.072 years
C)10 years
D)20 years
E)5 years
Question
Present Value of 1 
Future Value of 1 
Present Value of an Annuity of 1 
Future Value of an Annuity of 1 
A company has $46,000 today to invest in a fund that will earn 4% compounded annually.How much will the fund contain at the end of 6 years?
A)$58,204
B)$47,840
C)$58,075
D)$57,040
E)$62,582
Future Value of 1 Present Value of an Annuity of 1 Future Value of an Annuity of 1 A company has $46,000 today to invest in a fund that will earn 4% compounded annually.How much will the fund contain at the end of 6 years?A)$58,204
B)$47,840
C)$58,075
D)$57,040
E)$62,582
Question
Present Value of 1 
Future Value of 1 
Present Value of an Annuity of 1 
Future Value of an Annuity of 1 
The future value of an ________________ annuity is the accumulated value of each annuity payment with interest as of the date of the final payment.
Future Value of 1 Present Value of an Annuity of 1 Future Value of an Annuity of 1 The future value of an ________________ annuity is the accumulated value of each annuity payment with interest as of the date of the final payment. Question
Present Value of 1 
Future Value of 1 
Present Value of an Annuity of 1 
Future Value of an Annuity of 1 
_____________ is a borrower's payment to the owner of an asset for its use.
Future Value of 1 Present Value of an Annuity of 1 Future Value of an Annuity of 1 _____________ is a borrower's payment to the owner of an asset for its use. Question
Present Value of 1 
Future Value of 1 
Present Value of an Annuity of 1 
Future Value of an Annuity of 1 
Jackson has a loan that requires a $17,000 lump sum payment at the end of four years.The interest rate on the loan is 5%,compounded annually.How much did Jackson borrow today?
A)$16,150
B)$13,600
C)$11,504
D)$13,986
E)$15,343
Future Value of 1 Present Value of an Annuity of 1 Future Value of an Annuity of 1 Jackson has a loan that requires a $17,000 lump sum payment at the end of four years.The interest rate on the loan is 5%,compounded annually.How much did Jackson borrow today?A)$16,150
B)$13,600
C)$11,504
D)$13,986
E)$15,343
Question
Present Value of 1 
Future Value of 1 
Present Value of an Annuity of 1 
Future Value of an Annuity of 1 
The interest rate is also called the __________________ rate.
Future Value of 1 Present Value of an Annuity of 1 Future Value of an Annuity of 1 The interest rate is also called the __________________ rate. Question
Present Value of 1 
Future Value of 1 
Present Value of an Annuity of 1 
Future Value of an Annuity of 1 
An _____________ is a series of equal payments occurring at equal intervals.
Future Value of 1 Present Value of an Annuity of 1 Future Value of an Annuity of 1 An _____________ is a series of equal payments occurring at equal intervals. Question
Present Value of 1 
Future Value of 1 
Present Value of an Annuity of 1 
Future Value of an Annuity of 1 
To calculate present value of an amount,two factors are required: The __________________ and the ___________________.
Future Value of 1 Present Value of an Annuity of 1 Future Value of an Annuity of 1 To calculate present value of an amount,two factors are required: The __________________ and the ___________________.
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Deck 26: Appendix B: Time Value of Money
1
Present Value of 1 Future Value of 1 Present Value of an Annuity of 1 Future Value of an Annuity of 1 Russell Company has acquired a building with a loan that requires payments of $20,000 every six months for 5 years.The annual interest rate on the loan is 12%.What is the present value of the building?
A)$72,096
B)$113,004
C)$147,202
D)$86,590
E)$200,000
Future Value of 1 Present Value of an Annuity of 1 Future Value of an Annuity of 1 Russell Company has acquired a building with a loan that requires payments of $20,000 every six months for 5 years.The annual interest rate on the loan is 12%.What is the present value of the building?A)$72,096
B)$113,004
C)$147,202
D)$86,590
E)$200,000
C
2
Present Value of 1 Future Value of 1 Present Value of an Annuity of 1 Future Value of an Annuity of 1 If we want to know the value of present-day assets at a future date,we can use:
A)Present value computations.
B)Annuity computations.
C)Interest computations.
D)Future value computations.
E)Earnings computations.
Future Value of 1 Present Value of an Annuity of 1 Future Value of an Annuity of 1 If we want to know the value of present-day assets at a future date,we can use:A)Present value computations.
B)Annuity computations.
C)Interest computations.
D)Future value computations.
E)Earnings computations.
D
3
Present Value of 1 Future Value of 1 Present Value of an Annuity of 1 Future Value of an Annuity of 1 What amount can you borrow if you make six quarterly payments of $4,000 at a 12% annual rate of interest?
A)$24,838.00
B)$21,668.80
C)$31,049.00
D)$40,000.00
E)$44,800.00
Future Value of 1 Present Value of an Annuity of 1 Future Value of an Annuity of 1 What amount can you borrow if you make six quarterly payments of $4,000 at a 12% annual rate of interest?A)$24,838.00
B)$21,668.80
C)$31,049.00
D)$40,000.00
E)$44,800.00
B
4
Present Value of 1 Future Value of 1 Present Value of an Annuity of 1 Future Value of an Annuity of 1 The Masterson family is setting up a vacation fund,and they plan on depositing $1,000 per quarter in an investment that will pay 12% annual interest.What amount will they have available for their vacation at the end of 2 years?
A)$8,000.00
B)$8,960.00
C)$8,892.30
D)$8,240.00
E)$8,487.20
Future Value of 1 Present Value of an Annuity of 1 Future Value of an Annuity of 1 The Masterson family is setting up a vacation fund,and they plan on depositing $1,000 per quarter in an investment that will pay 12% annual interest.What amount will they have available for their vacation at the end of 2 years?A)$8,000.00
B)$8,960.00
C)$8,892.30
D)$8,240.00
E)$8,487.20
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5
Present Value of 1 Future Value of 1 Present Value of an Annuity of 1 Future Value of an Annuity of 1 Which interest rate column would you use from a present value or future value table for 8% interest compounded quarterly?
A)12%
B)6%
C)3%
D)2%
E)1%
Future Value of 1 Present Value of an Annuity of 1 Future Value of an Annuity of 1 Which interest rate column would you use from a present value or future value table for 8% interest compounded quarterly?A)12%
B)6%
C)3%
D)2%
E)1%
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6
Present Value of 1 Future Value of 1 Present Value of an Annuity of 1 Future Value of an Annuity of 1 Patricia wants to invest a sum of money today that will yield $10,000 at the end of 6 years.Assuming she can earn an interest rate of 6% compounded annually,how much must she invest today?
A)$7,050
B)$9,400
C)$6,000
D)$8,836
E)$8,306
Future Value of 1 Present Value of an Annuity of 1 Future Value of an Annuity of 1 Patricia wants to invest a sum of money today that will yield $10,000 at the end of 6 years.Assuming she can earn an interest rate of 6% compounded annually,how much must she invest today?A)$7,050
B)$9,400
C)$6,000
D)$8,836
E)$8,306
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7
Present Value of 1 Future Value of 1 Present Value of an Annuity of 1 Future Value of an Annuity of 1 A company is considering investing in a project that is expected to return $350,000 four years from now.How much is the company willing to pay for this investment if the company requires a 12% return?
A)$55,606
B)$137,681
C)$222,425
D)$265,764
E)$350,000
Future Value of 1 Present Value of an Annuity of 1 Future Value of an Annuity of 1 A company is considering investing in a project that is expected to return $350,000 four years from now.How much is the company willing to pay for this investment if the company requires a 12% return?A)$55,606
B)$137,681
C)$222,425
D)$265,764
E)$350,000
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Unlock for access to all 27 flashcards in this deck.
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8
Present Value of 1 Future Value of 1 Present Value of an Annuity of 1 Future Value of an Annuity of 1 An individual is planning to set-up an education fund for her daughter.She plans to invest $7,000 annually at the end of each year.She expects to withdraw money from the fund at the end of 9 years and expects to earn an annual return of 8%.What will be the total value of the fund at the end of 9 years?
A)$87,416
B)$68,040
C)$50,400
D)$126,000
E)$45,360
Future Value of 1 Present Value of an Annuity of 1 Future Value of an Annuity of 1 An individual is planning to set-up an education fund for her daughter.She plans to invest $7,000 annually at the end of each year.She expects to withdraw money from the fund at the end of 9 years and expects to earn an annual return of 8%.What will be the total value of the fund at the end of 9 years?A)$87,416
B)$68,040
C)$50,400
D)$126,000
E)$45,360
Unlock Deck
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9
Present Value of 1 Future Value of 1 Present Value of an Annuity of 1 Future Value of an Annuity of 1 A company needs to have $150,000 in 5 years,and will create a fund to insure that the $150,000 will be available.If it can earn a 6% return compounded annually,how much must the company invest in the fund today to equal the $150,000 at the end of 5 years?
A)$141,000
B)$112,095
C)$100,000
D)$45,000
E)$105,000
Future Value of 1 Present Value of an Annuity of 1 Future Value of an Annuity of 1 A company needs to have $150,000 in 5 years,and will create a fund to insure that the $150,000 will be available.If it can earn a 6% return compounded annually,how much must the company invest in the fund today to equal the $150,000 at the end of 5 years?A)$141,000
B)$112,095
C)$100,000
D)$45,000
E)$105,000
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10
Present Value of 1 Future Value of 1 Present Value of an Annuity of 1 Future Value of an Annuity of 1 Jason has a loan that requires a single payment of $4,000 at the end of 3 years.The loan's interest rate is 6%,compounded semiannually.How much did Jason borrow?
A)$3,358.40
B)$4,000.00
C)$3,660.40
D)$4,776.40
E)$3,350.00
Future Value of 1 Present Value of an Annuity of 1 Future Value of an Annuity of 1 Jason has a loan that requires a single payment of $4,000 at the end of 3 years.The loan's interest rate is 6%,compounded semiannually.How much did Jason borrow?A)$3,358.40
B)$4,000.00
C)$3,660.40
D)$4,776.40
E)$3,350.00
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11
Present Value of 1 Future Value of 1 Present Value of an Annuity of 1 Future Value of an Annuity of 1 What amount can you borrow if you make seven semiannual payments of $4,000 at an 8% annual rate of interest?
A)$28,000.00
B)$25,760.00
C)$31,049.00
D)$24,008.40
E)$35,691.20
Future Value of 1 Present Value of an Annuity of 1 Future Value of an Annuity of 1 What amount can you borrow if you make seven semiannual payments of $4,000 at an 8% annual rate of interest?A)$28,000.00
B)$25,760.00
C)$31,049.00
D)$24,008.40
E)$35,691.20
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12
Present Value of 1 Future Value of 1 Present Value of an Annuity of 1 Future Value of an Annuity of 1 Cody invests $1,800 per year from his summer wages at a 4% annual interest rate.He plans to take a European vacation at the end of 4 years when he graduates from college.How much will he have available to spend on his vacation?
A)$7,787.52
B)$7,488.00
C)$6,912.00
D)$7,200.00
E)$7,643.70
Future Value of 1 Present Value of an Annuity of 1 Future Value of an Annuity of 1 Cody invests $1,800 per year from his summer wages at a 4% annual interest rate.He plans to take a European vacation at the end of 4 years when he graduates from college.How much will he have available to spend on his vacation?A)$7,787.52
B)$7,488.00
C)$6,912.00
D)$7,200.00
E)$7,643.70
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13
Present Value of 1 Future Value of 1 Present Value of an Annuity of 1 Future Value of an Annuity of 1 Keisha has $3,500 now and plans on investing it in a fund that will pay her 12% interest compounded quarterly.How much will Keisha have accumulated after 2 years?
A)$4,433.80
B)$4,340.00
C)$4,390.40
D)$3,920.00
E)$3,500.00
Future Value of 1 Present Value of an Annuity of 1 Future Value of an Annuity of 1 Keisha has $3,500 now and plans on investing it in a fund that will pay her 12% interest compounded quarterly.How much will Keisha have accumulated after 2 years?A)$4,433.80
B)$4,340.00
C)$4,390.40
D)$3,920.00
E)$3,500.00
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14
Present Value of 1 Future Value of 1 Present Value of an Annuity of 1 Future Value of an Annuity of 1 Interest may be defined as:
A)Time.
B)A borrower's payment to the owner of an asset for its use.
C)The future value of a present amount.
D)Always a liability.
E)Always an asset.
Future Value of 1 Present Value of an Annuity of 1 Future Value of an Annuity of 1 Interest may be defined as:A)Time.
B)A borrower's payment to the owner of an asset for its use.
C)The future value of a present amount.
D)Always a liability.
E)Always an asset.
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15
Present Value of 1 Future Value of 1 Present Value of an Annuity of 1 Future Value of an Annuity of 1 Jessica received a gift of $7,500 at the time of her high school graduation.She invests it in an account that yields 10% compounded semi-annually.What will the value of Jessica's investment be at the end of 5 years?
A)$8,250.00
B)$11,250.00
C)$12,216.75
D)$9,375.00
E)$10,500.00
Future Value of 1 Present Value of an Annuity of 1 Future Value of an Annuity of 1 Jessica received a gift of $7,500 at the time of her high school graduation.She invests it in an account that yields 10% compounded semi-annually.What will the value of Jessica's investment be at the end of 5 years?A)$8,250.00
B)$11,250.00
C)$12,216.75
D)$9,375.00
E)$10,500.00
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16
Present Value of 1 Future Value of 1 Present Value of an Annuity of 1 Future Value of an Annuity of 1 An individual is planning to set-up an education fund for his grandchildren.He plans to invest $10,000 annually at the end of each year.He expects to withdraw money from the fund at the end of 10 years and expects to earn an annual return of 8%.What will be the total value of the fund at the end of 10 years?
A)$46,320
B)$67,107
C)$100,000
D)$144,870
E)$215,890
Future Value of 1 Present Value of an Annuity of 1 Future Value of an Annuity of 1 An individual is planning to set-up an education fund for his grandchildren.He plans to invest $10,000 annually at the end of each year.He expects to withdraw money from the fund at the end of 10 years and expects to earn an annual return of 8%.What will be the total value of the fund at the end of 10 years?A)$46,320
B)$67,107
C)$100,000
D)$144,870
E)$215,890
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17
Present Value of 1 Future Value of 1 Present Value of an Annuity of 1 Future Value of an Annuity of 1 Marc Lewis expects an investment of $25,000 to return $6,595 annually.His investment is earning 10% per year.How many annual payments will he receive?
A)Five payments
B)Six payments
C)Four payments
D)Three payments
E)More than six payments
Future Value of 1 Present Value of an Annuity of 1 Future Value of an Annuity of 1 Marc Lewis expects an investment of $25,000 to return $6,595 annually.His investment is earning 10% per year.How many annual payments will he receive?A)Five payments
B)Six payments
C)Four payments
D)Three payments
E)More than six payments
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18
Present Value of 1 Future Value of 1 Present Value of an Annuity of 1 Future Value of an Annuity of 1 Marshall has received an inheritance and wants to invest a sum of money today that will yield $5,000 at the end of each of the next 10 years.Assuming he can earn an interest rate of 5% compounded annually,how much of his inheritance must he invest today?
A)$50,000.00
B)$47,500.00
C)$45,125.00
D)$38,608.50
E)$100,000.00
Future Value of 1 Present Value of an Annuity of 1 Future Value of an Annuity of 1 Marshall has received an inheritance and wants to invest a sum of money today that will yield $5,000 at the end of each of the next 10 years.Assuming he can earn an interest rate of 5% compounded annually,how much of his inheritance must he invest today?A)$50,000.00
B)$47,500.00
C)$45,125.00
D)$38,608.50
E)$100,000.00
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19
Present Value of 1 Future Value of 1 Present Value of an Annuity of 1 Future Value of an Annuity of 1 A company is considering an investment that will return $22,000 semiannually at the end of each semiannual period for 4 years.If the company requires an annual return of 10%,what is the maximum amount it is willing to pay for this investment?
A)Not more than $69,738
B)Not more than $139,476
C)Not more than $88,000
D)Not more than $142,190
E)Not more than $176,000
Future Value of 1 Present Value of an Annuity of 1 Future Value of an Annuity of 1 A company is considering an investment that will return $22,000 semiannually at the end of each semiannual period for 4 years.If the company requires an annual return of 10%,what is the maximum amount it is willing to pay for this investment?A)Not more than $69,738
B)Not more than $139,476
C)Not more than $88,000
D)Not more than $142,190
E)Not more than $176,000
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20
Present Value of 1 Future Value of 1 Present Value of an Annuity of 1 Future Value of an Annuity of 1 Clara is setting up a retirement fund,and she plans on depositing $5,000 per year in an investment that will pay 7% annual interest.How long will it take her to reach her retirement goal of $69,080?
A)13.816 years
B)0.072 years
C)10 years
D)20 years
E)5 years
Future Value of 1 Present Value of an Annuity of 1 Future Value of an Annuity of 1 Clara is setting up a retirement fund,and she plans on depositing $5,000 per year in an investment that will pay 7% annual interest.How long will it take her to reach her retirement goal of $69,080?A)13.816 years
B)0.072 years
C)10 years
D)20 years
E)5 years
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21
Present Value of 1 Future Value of 1 Present Value of an Annuity of 1 Future Value of an Annuity of 1 A company has $46,000 today to invest in a fund that will earn 4% compounded annually.How much will the fund contain at the end of 6 years?
A)$58,204
B)$47,840
C)$58,075
D)$57,040
E)$62,582
Future Value of 1 Present Value of an Annuity of 1 Future Value of an Annuity of 1 A company has $46,000 today to invest in a fund that will earn 4% compounded annually.How much will the fund contain at the end of 6 years?A)$58,204
B)$47,840
C)$58,075
D)$57,040
E)$62,582
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22
Present Value of 1 Future Value of 1 Present Value of an Annuity of 1 Future Value of an Annuity of 1 The future value of an ________________ annuity is the accumulated value of each annuity payment with interest as of the date of the final payment.
Future Value of 1 Present Value of an Annuity of 1 Future Value of an Annuity of 1 The future value of an ________________ annuity is the accumulated value of each annuity payment with interest as of the date of the final payment. Unlock Deck
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23
Present Value of 1 Future Value of 1 Present Value of an Annuity of 1 Future Value of an Annuity of 1 _____________ is a borrower's payment to the owner of an asset for its use.
Future Value of 1 Present Value of an Annuity of 1 Future Value of an Annuity of 1 _____________ is a borrower's payment to the owner of an asset for its use. Unlock Deck
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24
Present Value of 1 Future Value of 1 Present Value of an Annuity of 1 Future Value of an Annuity of 1 Jackson has a loan that requires a $17,000 lump sum payment at the end of four years.The interest rate on the loan is 5%,compounded annually.How much did Jackson borrow today?
A)$16,150
B)$13,600
C)$11,504
D)$13,986
E)$15,343
Future Value of 1 Present Value of an Annuity of 1 Future Value of an Annuity of 1 Jackson has a loan that requires a $17,000 lump sum payment at the end of four years.The interest rate on the loan is 5%,compounded annually.How much did Jackson borrow today?A)$16,150
B)$13,600
C)$11,504
D)$13,986
E)$15,343
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25
Present Value of 1 Future Value of 1 Present Value of an Annuity of 1 Future Value of an Annuity of 1 The interest rate is also called the __________________ rate.
Future Value of 1 Present Value of an Annuity of 1 Future Value of an Annuity of 1 The interest rate is also called the __________________ rate. Unlock Deck
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26
Present Value of 1 Future Value of 1 Present Value of an Annuity of 1 Future Value of an Annuity of 1 An _____________ is a series of equal payments occurring at equal intervals.
Future Value of 1 Present Value of an Annuity of 1 Future Value of an Annuity of 1 An _____________ is a series of equal payments occurring at equal intervals. Unlock Deck
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27
Present Value of 1 Future Value of 1 Present Value of an Annuity of 1 Future Value of an Annuity of 1 To calculate present value of an amount,two factors are required: The __________________ and the ___________________.
Future Value of 1 Present Value of an Annuity of 1 Future Value of an Annuity of 1 To calculate present value of an amount,two factors are required: The __________________ and the ___________________. Unlock Deck
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Unlock Deck
Unlock for access to all 27 flashcards in this deck.
