Question 1

What is the future value of $600 deposited for 4 years earning an 11% interest rate annually?

Accepted Answer

A)  $792.90 
B)  $803.61 
C)  $899.23 
D)  $910.84 
A)  $792.90 
B)  $803.61 
C)  $899.23 
D)  $910.84

Question 2

What is the present value of a $600 payment in one year when the discount rate is 8%?

Accepted Answer

A)  $498.61 
B)  $525.87 
C)  $555.56 
D)  $575.09 
A)  $498.61 
B)  $525.87 
C)  $555.56 
D)  $575.09

Question 3

Solving for Time How many years will it take $100 to grow to $1,000 with an annual interest rate of 8 percent?

Accepted Answer

A)  9.00 years 
B)  10.00 years 
C)  29.92 years 
D)  33.35 years 
A)  9.00 years 
B)  10.00 years 
C)  29.92 years 
D)  33.35 years

Question 4

Moving Cash Flows What is the value in year 7 of a $700 cash flow made in year 3 when the interest rates are 10 percent?

Accepted Answer

A)  $478.11 
B)  $980.00 
C)  $1,024.87 
D)  $1,364.10 
A)  $478.11 
B)  $980.00 
C)  $1,024.87 
D)  $1,364.10

Question 5

What annual rate of return is implied on a $5,000 loan taken next year when $7,700 must be repaid in year 8?

Accepted Answer

A)  6.36% 
B)  7.12% 
C)  8.54% 
D)  11.62% 
A)  6.36% 
B)  7.12% 
C)  8.54% 
D)  11.62%

Question 6

You are considering an investment that is expected to pay 5% in year 1, 7% in years 2 and 3 and 9% in year 4. If you invest $2,000 today, what will this investment be worth at the end of the fourth year?

Accepted Answer

A)  $2,501.42 
B)  $2,693.71 
C)  $2,713.04 
D)  $2,620.68 
A)  $2,501.42 
B)  $2,693.71 
C)  $2,713.04 
D)  $2,620.68

Question 7

Solving for Time How long will it take $4,000 to reach $4,500 when it grows at 8 percent per year?

Accepted Answer

A)  1.12 years 
B)  1.48 years 
C)  1.53 years 
D)  9.00 years 
A)  1.12 years 
B)  1.48 years 
C)  1.53 years 
D)  9.00 years

Question 8

One Year Future Value What is the future value of $700 deposited for one year earning 4% interest rate annually?

Accepted Answer

A)  $28 
B)  $700 
C)  $728 
D)  $1428 
A)  $28 
B)  $700 
C)  $728 
D)  $1428

Question 9

Present Value What is the present value of a $200 payment made in 3 years when the discount rate is 8 percent?

Accepted Answer

A)  $150.00 
B)  $158.77 
C)  $251.94 
D)  $515.42 
A)  $150.00 
B)  $158.77 
C)  $251.94 
D)  $515.42

Question 10

When computing the rate of return from selling an investment, the number of years between the present and future cash flows is an important factor in determining:

Accepted Answer

A)  the annual rate earned. 
B)  the annual payments required. 
C)  whether the present value or the future value is a cash inflow. 
D)  whether the present value or the future value is a cash outflow. 
A)  the annual rate earned. 
B)  the annual payments required. 
C)  whether the present value or the future value is a cash inflow. 
D)  whether the present value or the future value is a cash outflow.

Question 11

What is the value in year 20 of a $1,000 cash flow made in year 8 if interest rates are 15% in years 6 through 13 and increase to 18% in the remaining years?

Accepted Answer

A)  $5,779.57 
B)  $5,9812.42 
C)  $6,005.71 
D)  $6,407.13 
A)  $5,779.57 
B)  $5,9812.42 
C)  $6,005.71 
D)  $6,407.13

Question 12

Rule of 72 Approximately how many years does it take to double a $600 investment when interest rates are 6% per year?

Accepted Answer

A)  .08 years 
B)  8 years 
C)  8.33 years 
D)  12 years 
A)  .08 years 
B)  8 years 
C)  8.33 years 
D)  12 years

Question 13

Solving for Rates What annual rate of return is earned on a $200 investment when it grows to $850 in ten years?

Accepted Answer

A)  3.25% 
B)  4.25% 
C)  13.47% 
D)  15.57% 
A)  3.25% 
B)  4.25% 
C)  13.47% 
D)  15.57%

Question 14

Solving for Rates What annual rate of return is implied on a $1,000 loan taken next year when $1,500 must be repaid in year 5?

Accepted Answer

A)  8.45% 
B)  10.00% 
C)  10.67% 
D)  12.50% 
A)  8.45% 
B)  10.00% 
C)  10.67% 
D)  12.50%

Question 15

Ten years ago, Hailey invested $1,000 and locked in a 9% annual rate for 30 years (end 20 years from now). Aidan can make a 20-year investment today and lock in an 8% rate. How much money should he invest now in order to have the same amount of money in 20 years as Hailey?

Accepted Answer

A)  $1,589.03 
B)  $2,846.56 
C)  $3,109.48 
D)  $2,109.73 
A)  $1,589.03 
B)  $2,846.56 
C)  $3,109.48 
D)  $2,109.73

Question 16

Discounting One Year What is the present value of a $250 payment in one year when the discount rate is 6 percent?

Accepted Answer

A)  $245.00 
B)  $235.85 
C)  $250.00 
D)  $265.00 
A)  $245.00 
B)  $235.85 
C)  $250.00 
D)  $265.00

Question 17

Moving Cash Flows What is the value in year 15 of a $600 cash flow made in year 3 when the interest rates are 4 percent?

Accepted Answer

A)  $374.76 
B)  $888.00 
C)  $960.62 
D)  $1,080.57 
A)  $374.76 
B)  $888.00 
C)  $960.62 
D)  $1,080.57

Question 18

Solving for Time How many years will it take $200 to grow to $250 with an annual interest rate of 4 percent?

Accepted Answer

A)  1.24 years 
B)  5.69 years 
C)  6.25 years 
D)  18.00 years 
A)  1.24 years 
B)  5.69 years 
C)  6.25 years 
D)  18.00 years

Question 19

Solving for Rates You invested $5,000 in the stock market one year ago. Today, the investment is valued at $5,500. What return did you earn? What return would you suffer next year for your investment to be valued at the original $5,000?

Accepted Answer

A)  10%, -9.09%, respectively 
B)  -10%, +9.09%, respectively 
C)  110%, -10%, respectively 
D)  110%, -9.09%, respectively 
A)  10%, -9.09%, respectively 
B)  -10%, +9.09%, respectively 
C)  110%, -10%, respectively 
D)  110%, -9.09%, respectively

Question 20

Solving for Rates You invested $1,000 in the stock market one year ago. Today, the investment is valued at $1,250. What return did you earn? What return would you suffer next year for your investment to be valued at the original $1,000?

Accepted Answer

A)  +25%, -20%, respectively 
B)  -25%, +20%, respectively 
C)  125%, -25%, respectively 
D)  125%, -20%, respectively 
A)  +25%, -20%, respectively 
B)  -25%, +20%, respectively 
C)  125%, -25%, respectively 
D)  125%, -20%, respectively

What is the future value of $600 deposited for 4 years earning an 11% interest rate annually?

What is the present value of a $600 payment in one year when the discount rate is 8%?

Solving for Time How many years will it take $100 to grow to $1,000 with an annual interest rate of 8 percent?

Moving Cash Flows What is the value in year 7 of a $700 cash flow made in year 3 when the interest rates are 10 percent?

What annual rate of return is implied on a $5,000 loan taken next year when $7,700 must be repaid in year 8?

You are considering an investment that is expected to pay 5% in year 1, 7% in years 2 and 3 and 9% in year 4. If you invest $2,000 today, what will this investment be worth at the end of the fourth year?

Solving for Time How long will it take $4,000 to reach $4,500 when it grows at 8 percent per year?

One Year Future Value What is the future value of $700 deposited for one year earning 4% interest rate annually?

Present Value What is the present value of a $200 payment made in 3 years when the discount rate is 8 percent?

When computing the rate of return from selling an investment, the number of years between the present and future cash flows is an important factor in determining:

What is the value in year 20 of a $1,000 cash flow made in year 8 if interest rates are 15% in years 6 through 13 and increase to 18% in the remaining years?

Rule of 72 Approximately how many years does it take to double a $600 investment when interest rates are 6% per year?

Solving for Rates What annual rate of return is earned on a $200 investment when it grows to $850 in ten years?

Solving for Rates What annual rate of return is implied on a $1,000 loan taken next year when $1,500 must be repaid in year 5?

Ten years ago, Hailey invested $1,000 and locked in a 9% annual rate for 30 years (end 20 years from now). Aidan can make a 20-year investment today and lock in an 8% rate. How much money should he invest now in order to have the same amount of money in 20 years as Hailey?

Discounting One Year What is the present value of a $250 payment in one year when the discount rate is 6 percent?

Moving Cash Flows What is the value in year 15 of a $600 cash flow made in year 3 when the interest rates are 4 percent?

Solving for Time How many years will it take $200 to grow to $250 with an annual interest rate of 4 percent?

Solving for Rates You invested $5,000 in the stock market one year ago. Today, the investment is valued at $5,500. What return did you earn? What return would you suffer next year for your investment to be valued at the original $5,000?

Solving for Rates You invested $1,000 in the stock market one year ago. Today, the investment is valued at $1,250. What return did you earn? What return would you suffer next year for your investment to be valued at the original $1,000?

Introduction to Financial Management

Reviewing Financial Statements

Analyzing Financial Statements

Time Value of Money 2: Analyzing Annuity Cash Flows

Understanding Financial Markets and Institutions

Valuing Bonds

Valuing Stocks

Characterizing Risk and Return

Estimating Risk and Return

Calculating the Cost of Capital

Estimating Cash Flows on Capital Budgeting Projects

Weighing Net Present Value and Other Capital Budgeting Criteria

Working Capital Management and Policies

Financial Planning and Forecasting

Assessing Long-Term Debt, Equity, and Capital Structure

Sharing Firm Wealth: Dividends, Share Repurchases, and Other Payouts

Issuing Capital and the Investment Banking Process

International Corporate Finance

Mergers and Acquisitions and Financial Distress

Filters

Exam 4: Time Value of Money 1: Analyzing Single Cash Flows

What is the future value of $600 deposited for 4 years earning an 11% interest rate annually?

What is the present value of a $600 payment in one year when the discount rate is 8%?

Solving for Time How many years will it take $100 to grow to $1,000 with an annual interest rate of 8 percent?

Moving Cash Flows What is the value in year 7 of a $700 cash flow made in year 3 when the interest rates are 10 percent?

What annual rate of return is implied on a $5,000 loan taken next year when $7,700 must be repaid in year 8?

You are considering an investment that is expected to pay 5% in year 1, 7% in years 2 and 3 and 9% in year 4. If you invest $2,000 today, what will this investment be worth at the end of the fourth year?

Solving for Time How long will it take $4,000 to reach $4,500 when it grows at 8 percent per year?

One Year Future Value What is the future value of $700 deposited for one year earning 4% interest rate annually?

Present Value What is the present value of a $200 payment made in 3 years when the discount rate is 8 percent?

When computing the rate of return from selling an investment, the number of years between the present and future cash flows is an important factor in determining:

What is the value in year 20 of a $1,000 cash flow made in year 8 if interest rates are 15% in years 6 through 13 and increase to 18% in the remaining years?

Rule of 72 Approximately how many years does it take to double a $600 investment when interest rates are 6% per year?

Solving for Rates What annual rate of return is earned on a $200 investment when it grows to $850 in ten years?

Solving for Rates What annual rate of return is implied on a $1,000 loan taken next year when $1,500 must be repaid in year 5?

Ten years ago, Hailey invested $1,000 and locked in a 9% annual rate for 30 years (end 20 years from now). Aidan can make a 20-year investment today and lock in an 8% rate. How much money should he invest now in order to have the same amount of money in 20 years as Hailey?

Discounting One Year What is the present value of a $250 payment in one year when the discount rate is 6 percent?

Moving Cash Flows What is the value in year 15 of a $600 cash flow made in year 3 when the interest rates are 4 percent?

Solving for Time How many years will it take $200 to grow to $250 with an annual interest rate of 4 percent?

Solving for Rates You invested $5,000 in the stock market one year ago. Today, the investment is valued at $5,500. What return did you earn? What return would you suffer next year for your investment to be valued at the original $5,000?

Solving for Rates You invested $1,000 in the stock market one year ago. Today, the investment is valued at $1,250. What return did you earn? What return would you suffer next year for your investment to be valued at the original $1,000?

Introduction to Financial Management

Reviewing Financial Statements

Analyzing Financial Statements

Time Value of Money 2: Analyzing Annuity Cash Flows

Understanding Financial Markets and Institutions

Valuing Bonds

Valuing Stocks

Characterizing Risk and Return

Estimating Risk and Return

Calculating the Cost of Capital

Estimating Cash Flows on Capital Budgeting Projects

Weighing Net Present Value and Other Capital Budgeting Criteria

Working Capital Management and Policies

Financial Planning and Forecasting

Assessing Long-Term Debt, Equity, and Capital Structure

Sharing Firm Wealth: Dividends, Share Repurchases, and Other Payouts

Issuing Capital and the Investment Banking Process

International Corporate Finance

Mergers and Acquisitions and Financial Distress

Filters