Question
1. Assuming the same amount of money will be received at the end of the term, which of the following will have the highest present
1. Assuming the same amount of money will be received at the end of the term, which of the following will have the highest present value?
6% interest for five years
6% interest for eight years
8% interest for ten years
6% interest for ten years
8% interest for five years
2. The time value of money is created by:
the fact that saving money is better than spending it
the elimination of the opportunity cost as a consideration
the existence of profitable investment alternatives and interest rates
the fact that the mere passing of time increases the value of money
3. You recently purchased a building for $200,000, paying $100,000 in cash and borrowing the rest. If the loan carries interest at 8% and is repaid in 10 equal annual (end-of-year) payments, what is the annual loan payment?
$10,000
$14,903
$29,806
$20,000
4.You just purchased a parcel of land for $20,000. If you expect a 12% annual rate of return on your investment, how much will you sell the land for in 10 years?
$77,440
$ 6,440
$50,000
$62,120
5. At 9% compounded annually, how long will it take $1,000 to double? (Select the closest year)
4 years
10 years
8 years
6 years
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