QUESTION 5

In calculation of time value of money, the interest rate has a_________ relationship to the present value and _________relationship to the future value of an investment.

1.             

positive; negative

2.            

negative; negative

3.           

negative; positive

4.          

positive; positive

5.            

None of the options specified here

10 points  

QUESTION 6

The present value of a single future sum:

1.             

is generally larger than the future sum.

2.            

depends upon the number of discount periods.

3.           

increases as the discount rate increases

4.          

increases as the time period increases

5.            

None of the options specified here

10 points  

QUESTION 7

Ms. Stormy anticipates receiving $50,000 at the end of fiveyears from her bank account. If the rate of interest is 8 percent,compounded annually, how much money Stormy must have put aside inthe bank account today?

1.             

$46,296.63

2.            

$54,000

3.           

$73,466.40

4.          

$34,029.19

5.            

None of the options specified here

10 points  

QUESTION 8

Edward Hill needs $25,000 at the end of 5 years. He currentlyhas $5,000 to invest. At what rate should he invest his money?

                               

38%

                               

5%

                               

10%

                               

20%

10 points  

QUESTION 9

At 8 percent compounded annually, how long will it take $750 tobecome $1500?

1.             

6.5 years

2.            

48 months

3.           

9 years

4.          

12 years

5.            

None of the options specified here

10 points