1 Which one of the following statements is NOT true? a)The further in the future you receive a dollar, the less it is worth today. b)A dollar in hand today is worth more than a dollar to be received in the future. c)The further in the future you receive a dollar, the more it is worth today. d)The value of a dollar invested at a positive interest rate grows over time. Question 2 The process of converting an amount given at the present time into a future value is called a)discounting. b)time value of money. c)compounding. d)none of these. Question 3 The Rule of 72 a)is fairly accurate for interest rates between 25 and 50 percent. b)states that the time to double your money (TDM) approximately equals 72/i, where 72 represents the years it takes to double your investment. c)can be used to determine the amount of time it takes to double an investment. d)none of these describe the Rule of 72. Question 4 Your aunt is looking to invest a certain amount today. Which of the following choices should she opt for? a)three-year CD at 7% annual rate b)three-year CD at 6.25% annual rate c)three-year CD at 6.75% annual rate d)three-year CD at 6.5% annual rate Question 5 Future value: Brittany Willis is looking to invest for retirement, which she hopes will be in 20 years. She is looking to invest $22,500 today in U.S. Treasury bonds that will earn interest at 6.25 percent annually. How much will she have at the end of 20 years? (Round to the nearest dollar.) a)$50,625 b)$75,642 c)None of these d)$68,870 Question 6 If Bank A pays interest on a monthly basis and Bank B pays the same interest on a quarterly basis, then investing $1,000 in Bank B will lead to a higher future value than investing the same amount in Bank A. a)True b)False . Question 7 The Rule of 72 allows one to calculate the approximate time needed to double an investment a)False b)True Question 8 The present value of an investment of $1,000 to be received in three years at a discount rate of 10 percent is $1,331. a)False b)True Question 9 If you had a choice of choosing a payment of $5,000 to be received in five years being discounted at 8 percent or at 10 percent, you should always choose the higher rate because it gives you the higher present value. a)False b)True Question 10 Randy has to choose between two cash flows. He could either receive the future value of an investment of $1,000 at 8 percent annually in three years or in five years. Randy should always choose the shorter investment term because it is worth more today. a)False b)True