APPENDIX G 1.. The future value of 1 factor will always be a. equal to 1 b. greater than 1 c. less than 1 d. equal to the interest rate. 2. Al of the following are necessary to compute the future value of a single amount except a. interest rate. b. number of periods. c. principal. d. maturity value. 3. McGoff Company deposits s20,000 in a fund at the end of each year for 5 years. The fund pays interest of 4% compounded annually. The balance in the fund at the end of 5 years is computed by multiplying a. $20,000 by the future value of 1 factor. b. $100,000 by 1.04. c. $100,000 by 1.20 d. $20,000 by the future value of an annuity factor 4. Which of the following is not necessary to know in computing the future value of an annuity? a. Amount of the periodic payments b. Interest rate c. Number of compounding periods d. Year the payments begin 5. . In present value calculations, the process of determining the present value is called a. allocating b. pricing c. negotiating. d. discounting 6. Present value is based on the dollar amount to be received. b. the length of time until the amount is received. c. the interest rate. d. All of these answers are correct. a