# Quiz 14: Appendix B Applying Present and Future Values

Business

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Q 4Q 4

Present and future value computations enable companies to measure or estimate the interest component of holding assets or liabilities over time.

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Q 6Q 6

Present Value of 1
Future Value of 1
Present Value of an Annuity of 1
Future Value of an Annuity of 1
The present value factor for determining the present value of $6,300 to be received three years from today at 10% interest compounded semiannually is 0.7462.(PV of $1,FV of $1,PVA of $1,and FVA of $1)(Use appropriate factor(s)from the tables provided.)

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Q 7Q 7

The present value of 1 formula is often useful when a borrowed asset must be repaid in full at a later date and the borrower wants to know the worth of the asset at the future date.

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Q 8Q 8

In a present value or future value table,the length of one time period may be interpreted as one year,one month,or any other length of time.

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Q 9Q 9

Present Value of 1
Future Value of 1
Present Value of an Annuity of 1
Future Value of an Annuity of 1
The present value of $2,000 to be received nine years from today at 8% interest compounded annually is $1,000.40.(PV of $1,FV of $1,PVA of $1,and FVA of $1)(Use appropriate factor(s)from the tables provided.)

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Q 10Q 10

Present Value of 1
Future Value of 1
Present Value of an Annuity of 1
Future Value of an Annuity of 1
Sandra has a savings account that has accumulated to $50,000.She started with $28,225,and earned interest at 10% compounded annually.It took her five years to accumulate the $50,000.(PV of $1,FV of $1,PVA of $1,and FVA of $1)(Use appropriate factor(s)from the tables provided.)

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True False

Q 11Q 11

Future value can be found if the interest rate (i),the number of periods (n),and the present value (p)are known.

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Q 13Q 13

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 $100 compounded semiannually for 3 years at 12% equals $140.49.(PV of $1,FV of $1,PVA of $1,and FVA of $1)(Use appropriate factor(s)from the tables provided.)

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Q 14Q 14

Present Value of 1
Future Value of 1
Present Value of an Annuity of 1
Future Value of an Annuity of 1
At an annual interest rate of 8% compounded annually,$5,300 will accumulate to a total of $7,210.65 in 5 years.(PV of $1,FV of $1,PVA of $1,and FVA of $1)(Use appropriate factor(s)from the tables provided.)

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True False

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Q 16Q 16

The present value of an annuity table can be used to determine the value today of a series of payments to be received in the future.

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Q 17Q 17

A series of equal payments made or received at the end of each period is an ordinary annuity.

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Q 18Q 18

Present Value of 1
Future Value of 1
Present Value of an Annuity of 1
Future Value of an Annuity of 1
The present value of $5,000 per year for three years at 12% compounded annually is $12,009.(PV of $1,FV of $1,PVA of $1,and FVA of $1)(Use appropriate factor(s)from the tables provided.)

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Q 19Q 19

Present Value of 1
Future Value of 1
Present Value of an Annuity of 1
Future Value of an Annuity of 1
The present value of four $10,000 semiannual payments invested for 2 years at 12% compounded semiannually is $43,746.(PV of $1,FV of $1,PVA of $1,and FVA of $1)(Use appropriate factor(s)from the tables provided.)

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Q 20Q 20

Present Value of 1
Future Value of 1
Present Value of an Annuity of 1
Future Value of an Annuity of 1
The present value of eight $5,000 semiannual payments invested for 4 years at 8% compounded semiannually is $33,663.50.(PV of $1,FV of $1,PVA of $1,and FVA of $1)(Use appropriate factor(s)from the tables provided.)

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Q 21Q 21

Present Value of 1
Future Value of 1
Present Value of an Annuity of 1
Future Value of an Annuity of 1
With deposits of $5,000 at the end of each year,you will have accumulated $38,578 at the end of the sixth year if the annual rate of interest is 10%.(PV of $1,FV of $1,PVA of $1,and FVA of $1)(Use appropriate factor(s)from the tables provided.)

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Q 22Q 22

The future value of an ordinary annuity is the accumulated value of each annuity payment excluding interest as of the date of the final payment.

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True False

Q 23Q 23

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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Multiple Choice

Q 24Q 24

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.

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Multiple Choice

Q 25Q 25

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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Multiple Choice

Q 26Q 26

Which column (i)and row (n)would you use from a present value or future value table for 8% interest compounded quarterly for 6 years?
A)(i)= 2%,(n)= 8
B)(i)= 8%,(n)= 6
C)(i)= 2%,(n)= 24
D)(i)= 4%,(n)= 12
E)(i)= 4%,(n)= 24

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Multiple Choice

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