Question 1

Sarah Denny purchased an investment for $40260.48. From this investment she will receive $6000 annually for the next 10 years starting one year from now. What rate of interest will Sarah be earning on her investment?

Accepted Answer

The answer of Sarah Denny purchased an investment for $40260.48....

Question 2

Cecilia Jeffries purchased an investment for $49090.75. From this investment she will receive $5000 annually for the next 20 years starting one year from now. What rate of interest will Cecilia be earning on her investment?

Accepted Answer

The answer of Cecilia Jeffries purchased an investment for $49090.75....

Question 3

Lucky Lou has just won the lottery and will receive an annual payment of $100000 every year for the next 20 years. If the annual interest rate is 8% what is the present value of the winnings?

Accepted Answer

The answer of Lucky Lou has just won the lottery...

Question 4

You are purchasing a car for $25000 and you obtain financing as follows: $2500 down payment 12% interest semiannual payments over 5 years.
Instructions
Compute the payment you will make every 6 months.

Accepted Answer

The answer of You are purchasing a car for $25000...

Question 5

If the present value of the cash ______________ exceeds the present value of the cash ________________ the investment should be rejected.

Accepted Answer

The answer of If the present value of the cash...

Question 6

The process of determining the present value is referred to as _________________ the future amount.

Accepted Answer

The answer of The process of determining the present value...

Question 7

CVS leases a building for 20 years. The lease requires 20 annual payments of $10000 each with the first payment due immediately. The interest rate in the lease is 10%. What is the present value of the cost of leasing the building?

Accepted Answer

The answer of CVS leases a building for 20 years....

Question 8

Match the items below by entering the appropriate code letter in the space provided. 11eb1392_1c37_96ec_8021_99bf91b8df8f

Accepted Answer

The answer of Match the items below by entering the...

Question 9

Payments or receipts of equal dollar amounts are referred to as __________________.

Accepted Answer

The answer of Payments or receipts of equal dollar amounts...

Question 10

Frostmore Company is considering investing in an annuity contract that will return $50000 annually at the end of each year for 20 years. What amount should Frostmore pay for this investment if it earns an 8% return?

Accepted Answer

The answer of Frostmore Company is considering investing in an...

Question 11

The _____________________ of an annuity is the sum of all the payments plus the accumulated compound interest on them.

Accepted Answer

The answer of The _____________________ of an annuity is the...

Question 12

Match between columns
                        Premises: The value today of a future amount to be received or paid.
The value at a future date of a given amount invested.
Return on principal plus interest for two or more periods.
Value today of a series of future amounts to be received or paid.
The sum of all the payments or receipts plus the accumulated compound interest on them.

Accepted Answer

The Answer of Compound interest and Future value of a is...

Quiz 27: Time Value of Money