1) Compounding interest means that interest will generate interest in every time period. a True b. False 2) An ordinary annuity has cash flows at the end of each period, a. True b. False 3) When solving a problem involving an annuity due, you must select the "beg" or beginning mode on your financial calculator a True b. False 4) The present value of a single future sum of money is inversely related to the discount rate, a True b. False 5) The present value of a $100 perpetuity discounted at 10% is $1,000. a True b. False 6) A rational investor would prefer to receive $1,200 today rather than $100 per month for 12 months a. True b. False 7) There is no difference in value between $100 you receive today and $100 you receive one year from today a True b. False Page 1 / 4 +