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
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$9,440.00
|
$9,528.12
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$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%
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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.
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The present value factor decreases as the interest rate increases.
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The present value factor is the reciprocal of the future value factor.
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The present value factor can be greater than 1.
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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.
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A share of preferred stock.
|
A consol.
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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.
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EAR.
|
Discounted interest.
|
The quoted interest rate.
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Which of the following interest rates will result in the highest amount of interest being charged?
7% per year, compounded daily.
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7.5% per year, compounded quarterly.
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8% per year, compounded annually.
|
7.8% per year, compounded daily.
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