19. Which of the following interest rates will come closest to doubling invested money in five years? a. 14% b. 15% c. 13% d. 16% 20. The higher the rate of interest: a. the smaller the future value of an amount invested today b. the smaller the present value of a future sum of money c. the larger the present value of a future sum of money d. all of the above 21. Your monthly statement from your bank credit card shows that the monthly rate of interest is 1.5%. What is the annual effective rate of interest you are being charged on your credit card? a. 18.00% b. 18.64% c. 19.56% d. 29.74% 22. Fidelity Mutual (an insurance company) has offered you a single premium annuity that will pay you $12,000 at the end of each year for the next 15 years. If you must pay $109,296 today for this annuity, what is your expected rate of return? a. 10% b. 8% c. 99% d. 7% 23. How much must be invested today to have $1,000 in two years if the interest rate is 5%? a $907.00 b. $950.00 e. $909.09 d. $900.00 24. Your uncle promises to give you $550 per quarter for the next five years starting today. How much is his promise worth right now if the interest rate is 8% compounded quarterly? a $9,173.14 b. $13,363.57 c. $13,630.84 d. $8,993.27 25. The more frequent the compounding the a greater the effective interest rate b. lesser the future value c. greater the present value d. greater the amount deposited Page 5 of 12