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1 2 K MATH 9 0 - - - Mathematics of Finance Time left 1 : 1 8 : 0 7 Question 1 Not yet
K MATH Mathematics of Finance
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The notion behind the time value of money is the underlying principle that
a
a dollar is not worth much
b
a dollar today is worth more than a dollar tomorrow
c
a dollar today is always less than two dollars in the future
d
a dollar tomorrow is equal in value to a dollar tomorrow
e
a dollar tomorrow is worth more than a dollar today
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Which is a plausible explanation as to why Jim would prefer to receive $ from today rather than $ in one year?
a
The money would be paid by Jims father. Jim is sure that his father will make either payment.
b
Jim recently received a lot of money from his grandfather. He is currently not so sure of how he will use all that money.
c
Jim wants to spend the money on the latest Yeezy sneakers. He does not know whether the shoes will be available or fashionable by next year.
d
Jim is not a very savvy crypto investor. He would probably use the money to buy Treasury securities earning a year.
e
For the last several years, the rate of inflation has averaged around per year.
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If the compounding frequency is monthly, then m the number of compounding periods per year is:
a
b
c
d
e
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You want to determine the future value of $ after years at per annum compounded monthly. Find i periodic rate
a
b
c
d
e
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You wish to calculate the present value of $ due in two years and nine months if interest is pa compounded every two months. Find n the number of compounding periods
a
b
c
d
e
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Calculate the effective rate of interest for the first year, if the rate of interest is pa compounded quarterly? rounding the answer to significant decimal figures
a
b
c
d
e
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You are trying to calculate how long it will take $ invested at pa compounded quarterly to double. Applying the tools that you have learned in this class you initially find n the number of periodic periods This answer No will initially be in terms of
a
years
b
days
c
quarters
d
months
e
halfyears
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What is the discounted value of deposits of $ made at the end of each month for fourteen years if interest is compounded monthly?
a
$
b
$
c
$
d
$
e
$
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Fred bought a vacation property for $ down and monthly mortgage payments of $ at the end of each month for six years. Interest is compounded monthly. What is the purchase price of the property?
a
$
b
$
c
$
d
$
e
$
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Joanna plans to pay off a debt by payments of $ one year from now, $ eighteen months from now, and $ thirty months from now. What single payment now would settle the debt if money is worth pa compounded quarterly?
a
$
b
$
c
$
d
$
e
$
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Bitcoin was at $ on January On January the price of Bitcoin was $ a coin. Calculate the price appreciation of cryptocurrency as percent per year, compounded annually. This is not investment advice
a
b
c
d
e
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Galaxy Company has added a crypto fund. The highrisk fund will earn a significant riskreward return rate of per year, compounded monthly. Find how long it will take $ invested in this fund to become $
a
years
b
years
c
years
d
years
e
years
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Galaxy Company has added a crypto fund. The highrisk fund will earn a significant riskreward return rate of per year, compounded monthly. Find how long it will take $ invested in this fund to quadruple x
a
years
b
years
c
years
d
years
e
years
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Galaxy Company has added a crypto fund. The highrisk fund will earn a significant riskreward return rate of per year, compounded monthly. Find how long it will take $ invested in this fund to grow eightfold x
a
years
b
years
c
years
d
years
e
years
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On September you put $ in a money market fund. On March you deposit another $ and on January you added another $ This fund pays interest at the annual rate of compounded monthly. Find the future value of the fund on March immediately after the second deposit.
a
$
b
$
c
$
d
$
e
$
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On September you decided to put $ in a money market fund. On March you deposit another $ and on January you added another $ This fund pays interest at the annual rate of compounded monthly. Find the future value of the fund on January
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