The subject is business finance and the lesson is about present and future value and loan amortization
1. You are investing P10,000 today in a savings account at your local bank. Which one of the following terms refers to the value of this investment one year from now? A. Future value C. Principal amounts B. Present value D. Discounted value 2. The mortgage payment for a car is P35,000 at the end of each month and interest is 8%% per year compounded monthly. This is an example of A. Annuity C. Single amount B. Lump sum D. Mixed stream 3. Mario will be making a lump sum payment of P1.6 million on the condominium he is buying two years from now. If he wants to set aside funds from now and invest it, that will earn interest of 3%, net taxes every year and this amount is compounded annually, how much does he need to invest today? A. P1,697,440.00 C. P1,508,153.45 B. P1,696,000.00 D. P1,507,494.77 4. What is the present value of a 3-year annuity of P25,000 if the discount rate is 6%? A. P75,000.00 C. P29,775.40 B. P66,825.00 D. P29,500.00 5. Your grandmother has promised to give you P50,000 when you graduate from college. She is expecting you to graduate five years from now. What happens to the present value of this gift if you delay your graduation by one year and graduate six years from now? A. Remains constant C. Decreases B. Increases D. Becomes negative 6. Luis is going to receive $20,000 six years from now. Lee is going to receive F20,000 nine years from now. which one of the following statements is correct if both Luis and Lee apply a 7 percent discount rate to these amounts? A. The present values of Luis and Lee's monies are equal. B. In future pesos, Lee's money is worth more than Luis' money. C. In today's pesos, Luis' money is worth more than Lee's D. Lee's money is worth more than Luis' money given the 7 percent discount rate. 7. Which one of the following will produce the highest present value interest factor? A. 6% interest for 5 years C. 8% interest for 5 years B. 6% interest for 8 years D. 8% interest for 10 years 8. Your father invested a lump sum 26 years ago at 4.25% interest. Today, he gave you the proceeds of that investment which totaled P51,480.79. How much did your father originally invest? A. P15,929.47 C. P16,391.61 B. P16,200.00 D. P17,999.45 9. You have just received notification that you have won the P1.4 million first prize in the PCSO lottery. However, the prize will be rewarded on your 90- birthday, 70 years from now. The appropriate discount rate is 8%. What is the present value of your winnings? A. P4,288.16 C. P15,309.31 B. P6,404.20 D. P23,333.33 10. Which one of the following variables is the exponent in the present value formula? A. Present value C. Interest rate B. Future value D. Time
