14 Questions
| Total Attempts: 251

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Questions and Answers

- 1.Present and future value tables of $1 at 3% are presented below: NFV $1PV $1FVA $1PVA $1FVAD $1PVAD $111.030000.970871.00000.970871.03001.0000021.060900.942602.03001.913472.09091.9708731.092730.915143.09092.828613.18362.9134741.125510.888494.18363.717104.30913.8286151.159270.862615.30914.579715.46844.7171061.194050.837486.46845.417196.66255.5797171.229870.813097.66256.230287.89236.4171981.266770.789418.89237.019699.15917.2302891.304770.7664210.15917.7861110.46398.01969101.343920.7440911.46398.5302011.80788.78611111.384230.7224212.80789.2526213.19209.53020121.425760.7013814.19209.9540014.617810.25262131.468530.6809515.617810.6349616.086310.95400141.512590.6611217.086311.2960717.598911.63496151.557970.6418618.598911.9379419.156912.29607161.604710.6231720.156912.5611020.761612.93794 Today Thomas deposited $130,000 in a 2-year, 12% CD that compounds quarterly. What is the maturity value of the CD?
- A.
164,680

- B.
224,694

- C.
137,800

- D.
240,686

- 2.Present and future value tables of $1 at 3% are presented below: NFV $1PV $1FVA $1PVA $1FVAD $1PVAD $111.030000.970871.00000.970871.03001.0000021.060900.942602.03001.913472.09091.9708731.092730.915143.09092.828613.18362.9134741.125510.888494.18363.717104.30913.8286151.159270.862615.30914.579715.46844.7171061.194050.837486.46845.417196.66255.5797171.229870.813097.66256.230287.89236.4171981.266770.789418.89237.019699.15917.2302891.304770.7664210.15917.7861110.46398.01969101.343920.7440911.46398.5302011.80788.78611111.384230.7224212.80789.2526213.19209.53020121.425760.7013814.19209.9540014.617810.25262131.468530.6809515.617810.6349616.086310.95400141.512590.6611217.086311.2960717.598911.63496151.557970.6418618.598911.9379419.156912.29607161.604710.6231720.156912.5611020.761612.93794 Carol wants to invest money in a 6% CD account that compounds semiannually. Carol would like the account to have a balance of $90,000 8 years from now. How much must Carol deposit to accomplish her goal?
- A.
$58,691

- B.
$70,890

- C.
$54,035

- D.
$56,085

- 3.Present and future value tables of $1 at 3% are presented below: NFV $1PV $1FVA $1PVA $1FVAD $1PVAD $111.030000.970871.00000.970871.03001.0000021.060900.942602.03001.913472.09091.9708731.092730.915143.09092.828613.18362.9134741.125510.888494.18363.717104.30913.8286151.159270.862615.30914.579715.46844.7171061.194050.837486.46845.417196.66255.5797171.229870.813097.66256.230287.89236.4171981.266770.789418.89237.019699.15917.2302891.304770.7664210.15917.7861110.46398.01969101.343920.7440911.46398.5302011.80788.78611111.384230.7224212.80789.2526213.19209.53020121.425760.7013814.19209.9540014.617810.25262131.468530.6809515.617810.6349616.086310.95400141.512590.6611217.086311.2960717.598911.63496151.557970.6418618.598911.9379419.156912.29607161.604710.6231720.156912.5611020.761612.93794 Shane wants to invest money in a 6% CD account that compounds semiannually. Shane would like the account to have a balance of $100,000 3.5 years from now. How much must Shane deposit to accomplish his goal?
- A.
$81,824

- B.
$81,309

- C.
$21,000

- D.
$87,809

- 4.Present and future value tables of $1 at 3% are presented below: NFV $1PV $1FVA $1PVA $1FVAD $1PVAD $111.030000.970871.00000.970871.03001.0000021.060900.942602.03001.913472.09091.9708731.092730.915143.09092.828613.18362.9134741.125510.888494.18363.717104.30913.8286151.159270.862615.30914.579715.46844.7171061.194050.837486.46845.417196.66255.5797171.229870.813097.66256.230287.89236.4171981.266770.789418.89237.019699.15917.2302891.304770.7664210.15917.7861110.46398.01969101.343920.7440911.46398.5302011.80788.78611111.384230.7224212.80789.2526213.19209.53020121.425760.7013814.19209.9540014.617810.25262131.468530.6809515.617810.6349616.086310.95400141.512590.6611217.086311.2960717.598911.63496151.557970.6418618.598911.9379419.156912.29607161.604710.6231720.156912.5611020.761612.93794 Bill wants to give Maria a $550,000 gift in 6.5 years. If money is worth 6% compounded semiannually, what is Maria's gift worth today? Your Answer:
- A.
$374,523

- B.
$373,128

- C.
$547,250

- D.
$376,048

- 5.Present and future value tables of $1 at 3% are presented below: NFV $1PV $1FVA $1PVA $1FVAD $1PVAD $111.030000.970871.00000.970871.03001.0000021.060900.942602.03001.913472.09091.9708731.092730.915143.09092.828613.18362.9134741.125510.888494.18363.717104.30913.8286151.159270.862615.30914.579715.46844.7171061.194050.837486.46845.417196.66255.5797171.229870.813097.66256.230287.89236.4171981.266770.789418.89237.019699.15917.2302891.304770.7664210.15917.7861110.46398.01969101.343920.7440911.46398.5302011.80788.78611111.384230.7224212.80789.2526213.19209.53020121.425760.7013814.19209.9540014.617810.25262131.468530.6809515.617810.6349616.086310.95400141.512590.6611217.086311.2960717.598911.63496151.557970.6418618.598911.9379419.156912.29607161.604710.6231720.156912.5611020.761612.93794
- A.
$19,302.

- B.
$20,031

- C.
$20,559

- D.
$19,050

- 6.Present and future value tables of $1 at 3% are presented below: NFV $1PV $1FVA $1PVA $1FVAD $1PVAD $111.030000.970871.00000.970871.03001.0000021.060900.942602.03001.913472.09091.9708731.092730.915143.09092.828613.18362.9134741.125510.888494.18363.717104.30913.8286151.159270.862615.30914.579715.46844.7171061.194050.837486.46845.417196.66255.5797171.229870.813097.66256.230287.89236.4171981.266770.789418.89237.019699.15917.2302891.304770.7664210.15917.7861110.46398.01969101.343920.7440911.46398.5302011.80788.78611111.384230.7224212.80789.2526213.19209.53020121.425760.7013814.19209.9540014.617810.25262131.468530.6809515.617810.6349616.086310.95400141.512590.6611217.086311.2960717.598911.63496151.557970.6418618.598911.9379419.156912.29607161.604710.6231720.156912.5611020.761612.93794 Shelley wants to cash in her winning lottery ticket. She can either receive five, $190,000 semiannual payments starting today, or she can receive a lump-sum payment now based on a 6% annual interest rate. What is the equivalent lump-sum
- A.
$896,249

- B.
$725,931

- C.
$727,436

- D.
$905,758

- 7.Present and future value tables of $1 at 3% are presented below: NFV $1PV $1FVA $1PVA $1FVAD $1PVAD $111.030000.970871.00000.970871.03001.0000021.060900.942602.03001.913472.09091.9708731.092730.915143.09092.828613.18362.9134741.125510.888494.18363.717104.30913.8286151.159270.862615.30914.579715.46844.7171061.194050.837486.46845.417196.66255.5797171.229870.813097.66256.230287.89236.4171981.266770.789418.89237.019699.15917.2302891.304770.7664210.15917.7861110.46398.01969101.343920.7440911.46398.5302011.80788.78611111.384230.7224212.80789.2526213.19209.53020121.425760.7013814.19209.9540014.617810.25262131.468530.6809515.617810.6349616.086310.95400141.512590.6611217.086311.2960717.598911.63496151.557970.6418618.598911.9379419.156912.29607161.604710.6231720.156912.5611020.761612.93794 Jose wants to cash in his winning lottery ticket. He can either receive seven, $6,000 semiannual payments starting today, or he can receive a lump-sum payment now based on a 6% annual interest rate. What would be the lump-sum payment?
- A.
$37,382

- B.
$35,661

- C.
$36,782

- D.
$38,503

- 8.Present and future value tables of 1 at 11% are presented below. PV ofFV ofPVA of FVA of $1$1 $1 $11.900901.11000.900901.00002.811621.232101.712522.11003.731191.367632.443713.34214.658731.518073.102454.70975.593451.685063.695906.22786.534641.870414.230547.9129 Spielberg Inc. signed a $190,000 noninterest-bearing note due in five years from a production company eager to do business. Comparable borrowings have carried an 11% interest rate. At what amount should this debt be valued at its inception?
- A.
$210,900

- B.
$190,000

- C.
$112,755

- D.
$101,582

- 9.Present and future value tables of 1 at 11% are presented below. PV ofFV ofPVA of FVA of $1$1 $1 $11.900901.11000.900901.00002.811621.232101.712522.11003.731191.367632.443713.34214.658731.518073.102454.70975.593451.685063.695906.22786.534641.870414.230547.9129 Polo Publishers purchased a multi-color offset press with terms of $55,000 down and a noninterest-bearing note requiring payment of $40,000 at the end of each year for five years. The interest rate implicit in the purchase contract is 11%. Polo would record the asset at:
- A.
$202,836

- B.
$95,000

- C.
$203,274

- D.
$147,836

- 10.A series of equal periodic payments that starts more than one period after the agreement is called:
- A.
Annuity due

- B.
Ordinary due

- C.
Future annuity

- D.
Deferred selected

- 11.Yamaha Inc. hires a new chief financial officer and promises to pay him a lump sum bonus four years after he joins the company. The new CFO insists that the company invest an amount of money at the beginning of each year in a 7% fixed rate investment fund to insure the bonus will be available. To determine the amount that must be invested each year, a computation must be made using the formula for:
- A.
Future value of a deferred annuity

- B.
Future value of an ordinary annuity

- C.
Future value of an annuity

- D.
None of these is correct

- 12.Zulu Corporation hires a new chief executive officer and promises to pay her a signing bonus of $2 million per year for 10 years, starting five years after she joins the company. The liability for this bonus when the CEO is hired:
- A.
Is the present value of a deferred annuity.

- B.
Is zero because no cash is owed for five years

- C.
Is the present value of an annuity due

- D.
Is $20 million.

- 13.Which of the following must be known to compute the interest rate paid from financing an asset purchase with an annuity?
- A.
Fair value of the asset purchased, number and dollar amount of the annuity payments.

- B.
Fair value of the asset and timing of the annuity payments.

- C.
Number of annuity payments and future value of the annuity.

- D.
Present value of the annuity, dollar amount and timing of the annuity payments.

- 14.Loan C has the same principal amount, payment amount and maturity date as Loan D. However, Loan C is structured as an annuity due while Loan D is structured as an ordinary annuity. Loan C's interest rate is:
- A.
Higher than Loan D.

- B.
The same as Loan D.

- C.
Indeterminate compared to Loan D

- D.
Less than Loan D.