Exercise 1:

TRUE OR FALSE

1. If two varieties of compound interest are involved, the length of time of an investment is irrelevant on considering the equivalence of the two rates.

2. The phrases amount of discount and amount of interest cannot be used interchangeably in situations involving rates of discount.

3. To discount an amount F for n conversionperiods is to find its present value P on a day which is n periods after P is due.

4. The frequency with which Interest is paid and reinvested to earn additional Interest is called term.

5. Compounding refers to the process of interestbeing reinvested to earn an additional Interest.

6. With one conversion period, compound interest produceshigher accumulated value than simple Interest

7. When simple Interest or discount is involved, the size of equivalent rates depends on the length of the investment.

8. Compound interest becomes progressively more favorable to the investor as the period of investment increases.

9. The amount received together with the amount invested after a period of time is called accumulated value.

10. To say that a principal is accumulated 5% compunded annually is equivalent to saying that a principal is accumulated at effective rate of 5%

2:59 With one conversion period, 2 points compound interest produces higher accumulated value than simple Interest. * True When simple interest or discount Is 2 pools Involved, the size of equivalent rates depends on the length of the Investment. * false Compound Interest becomes 2 points progressively more favorable to the Investor as the period of investment Increases * true false The amount received together with 2 points the amount invested after a period of time is called accumulated value. * O true false To say that a principal is accumulated > points at 5% compounded annually is equivalent to saying that a principal Is accumulated at effective rate of 5%. * false O true2:58 If two varieties of compound interest 2 prints are involved, the length of time of an Investment is irrelevant on considering the equivalence of the two rates." O false The phrases amount of discount and 2 ports amount of interest cannot be used Interchangeably in situations involving rates of discount. * true O false To discount an amount F for n 2 promo conversion perlods is to find its present value P on a day which is n periods after P is due." true O false The frequency with which interest is 2 points paid and reinvested to earn additional Interest is called term, * O false true Compounding refers to the process of 2 points interest being reinvested to earn an additional interest. * false O