Multiple choice

1.

15 000 is invested in a savings account for 5 years at 12% p.a. compound interest, but the interest is calculated quarterly. What is the end value of the investment?

a.

54 075

b.

223 200

c.

26 430

d.

27 090

2.

A bank has granted you a loan of 20 000. It has to be repaid at the end of each year over a period of 10 years. The bank charges 14% interest per year on the loan. What is the amount payable at the end of each year in order to pay back the loan?

a.

3 834,36

b.

7 414,44

c.

2 280,00

d.

4 847,22

3.

10 000 is invested in a savings account for 10 years at 20% p.a. compound interest, but the interest is calculated semi-annually. What is the end value of the investment?

a.

67 270

b.

27 670

c.

47 860

d.

87 410

4.

The following are important considerations in financing assets, except:

a.

All of these

b.

Suitability

c.

Control

d.

Flexibility

e.

Timing

5.

If firms obtain funds from creditors or by means of preference shares, they.

a.

Sacrifice all share of control of management

b.

Sacrifice little or no share of control of management

c.

Gain no share of control of management

d.

None of the above