FIN Unit 2 QUIZ
If you put $8,000 in a savings account today, how much will it grow to in 3 years if the bank pays 6% annual interest compounded continuously?
[removed] | $8,494.69 |
[removed] | $9,440.00 |
[removed] | $9,528.12 |
[removed] | $9,577.74 |
A company issues zero coupon bonds which mature in 30 years. These bonds can be bought for $99.38 and then pay no annual interest payments, only $1000 at maturity. What is the annual percentage cost of these bonds to the issuing company?
[removed] | 30% |
[removed] | 17% |
[removed] | 12% |
[removed] | 8% |
If you can invest $10,000 at a 7% annual rate, compounded monthly, how long will it take to have $13,050?
[removed] | 19 months |
[removed] | 52 months |
[removed] | 16 months |
[removed] | 46 months |
Which of the following statements is not true?
[removed] | The present value factor is also known as the discount factor. |
[removed] | The present value factor decreases as the interest rate increases. |
[removed] | The present value factor is the reciprocal of the future value factor. |
[removed]The present value factor can be greater than 1. | |||||||||
Aaron earns 10% interest compounded annually on his savings. He will deposit $750 today, $825 one year from today, and $910 two years from today. What will be the account balance three years from today?
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The amount borrowed on a loan equals the
[removed] | compounded value of the loan payments |
[removed] | sum of the loan payments |
[removed] | discounted value of the loan payments |
[removed] | future value of the loan payments |
Which of the following examples represents a growing annuity?
[removed] | A 30-year mortgage. |
[removed] | A share of preferred stock. |
[removed] | A consol. |
[removed] | An inflation-adjusted 25-year lease. |
The EAR will equal the APR if interest is compounded
[removed] | daily. |
[removed] | monthly. |
[removed] | quarterly. |
[removed] | annually. |
Which of the following is not a typical way in which interest rates are quoted in the marketplace?
[removed] | APR. |
[removed] | EAR. |
[removed] | Discounted interest. |
[removed] | The quoted interest rate. |
Which of the following interest rates will result in the highest amount of interest being charged?
[removed] | 7% per year, compounded daily. |
[removed] | 7.5% per year, compounded quarterly. |
[removed] | 8% per year, compounded annually. |
[removed] | 7.8% per year, compounded daily. |
12 years ago
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