1)

An investor expects to receive payments of $3,000 every 6 months for the next 7 years. If the market rate of interest is 4% per year compounded semi-annually, what is the future value of these payments?

a.$23,694.87

b.$47,921.82

c.$54,875.73

d.$22,302.84

2)

Chris Hines invested $12,000 in a municipal bond. The bond pays 8% interest and matures in 3 years. How much money will Chris have at maturity?

a.$15,116.52

b.$22,211,16

c.$36,960.00

d.$38,596.80

3)

In transactions involving the borrowing or lending of money, as interest is paid, the balance in the liability account of the borrower

a.remains unchanged.

b.decreases.

c.is transferred to interest income.

d.increases.

4)

Manatee Manufacturing sells a piece of equipment to make room for new machinery. Manatee will receive the sales price of $50,000 at the end of 4 years. Assuming interest at a rate of 6% per year, the Present Value of this future cash flow is how much?

a.$39,604.50

b.$173,255.50

c.$63,124.00

d.$39,515.50

5)

The first cash flow in the future value of an annuity occurs when?

a.At the start of the first period.

b.At the maturity date of the loan.

c.At the end of the first period.

d.When interest is collected.

6)

Julie expects to receive payments of $1,200 at the end of the year for the next 3 years. Assuming Julie invests the payments into an account earning 8%, how much will she have at the end of the 3 years?

a.$3,985.68

b.$10,670.81

c.$3,600.00

d.$3,092.52

8)

Tom liquidates an investment, and his proceeds will be received in 8 annual payments of $10,000 each with interest computed at 7%. What is the Present Value of this Annuity?

a.$89,228.00

b.$5,820.10

c.$17,181.90

d.$59,713.00

9)

Calculations of future values are projections of the future balance based upon

a.future cash flows.

b.past and future cash flows.

c.expected future cash flows.

d.past cash flows.