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?
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?
$8,494.69 |
$9,440.00 |
$9,528.12 |
$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?
30% |
17% |
12% |
8% |
If you can invest $10,000 at a 7% annual rate, compounded monthly, how long will it take to have $13,050?
19 months |
52 months |
16 months |
46 months |
Which of the following statements is not true?
The present value factor is also known as the discount factor. |
The present value factor decreases as the interest rate increases. |
The present value factor is the reciprocal of the future value factor. |
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?
|
|
The amount borrowed on a loan equals the
compounded value of the loan payments |
sum of the loan payments |
discounted value of the loan payments |
future value of the loan payments |
Which of the following examples represents a growing annuity?
A 30-year mortgage. |
A share of preferred stock. |
A consol. |
An inflation-adjusted 25-year lease. |
The EAR will equal the APR if interest is compounded
daily. |
monthly. |
quarterly. |
annually. |
Which of the following is not a typical way in which interest rates are quoted in the marketplace?
APR. |
EAR. |
Discounted interest. |
The quoted interest rate. |
Which of the following interest rates will result in the highest amount of interest being charged?
7% per year, compounded daily. |
7.5% per year, compounded quarterly. |
8% per year, compounded annually. |
7.8% per year, compounded daily. |
12 years ago
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