1. As time gets longer the present value of a future value gets: A. Stays the same B. Gets larger C. Gets smaller D. Gets inflated As the interest rate increases the future value of a lump sum gets: A. Stays the same B. Gets larger C. Gets inverted D. Gets smaller E. Gets Discounted 2. 3. Interest earned on both the initial principal and the interest reinvested from prior periods is called: A. Free interest B. Dual interest C. Simple interest D. Interest on interest E. Compound interest What is the relationship between present value and future value interest factors? A. The present value and future value factors are equal to each other. B. The present value factor is the exponent of the future value factor C. The future value factor is the exponent of the present value factor. D. The factors are reciprocals of each other E. There is no relationship between the two factors. 4. 5. According to the Rule of 72, you can do which one of the following? A. Double your money in five years at 7.2 percent interest B. Double your money in 7.2 years at 8 percent interest C. Double your money in 8 years at 9 percent interest D. Triple your money in 7.2 years at 5 percent interest E. Triple your money at 10 percent interest in 7.2 years Which one of the following accurately defines a perpetuity? A. A limited number or equal payments paid in event time increments B. Payments of equal amounts that are paid irregularly but indefinitely C. Varying amounts that are paid at even intervals forever D. Unending equal payments paid at equal time intervals E. Unending equal payments paid at either equal or unequal time intervals 6