You have $300,000 that you want to invest in a one year Certificate of Deposit (CD) with a 4% annual interest rate. What will be the value of that CD in a year?

Question 1 options:

$315,000

$420,000

$312,000

$301,200

Question 2 (1 point)

Which of the following is the correct formula for calculating future value with simple interest?

Question 2 options:

FV = PV * (1+i)t

All of these answers

FV = PV * i

FV = PV * (1+i*t)

Question 3 (1 point)

You plan to invest $100,000 in a 3 year Certificate of Deposit that has a 5% compound interest rate. What is its future value?

Question 3 options:

$115,927

$105,000

$115,763

$115,000

Question 4 (1 point)

You plan to invest $100,000 in a 3 year Certificate of Deposit that has a simple interest rate of 5%. What is its future value?

Question 4 options:

$105,000

$115,927

$115,000

$115,763

Question 5 (1 point)

What is the future value in 30 years of $100,000 invested today in a savings account earning a 1% compound interest rate every year (rounded up to the nearest dollar)?

Question 5 options:

30000

134785

More than $134785

130000

Question 6 (1 point)

What is the future value in 30 years of $100,000 invested today in a savings account earning a 1% simple interest rate every year (rounded up to the nearest dollar)?

Question 6 options:

134,785

30,000

More than $134,785

130,000

Question 7 (1 point)

Which of the following correctly defines a method of determining a single period investment's yield?

Question 7 options:

Change-in-value equals the investment's FV minus its PV. Divide that by PV and multiply by 100%.

The Effective Annual rate is the interest rate multiplied by the number of payment periods per year.

Annual Percentage Rate = (1+(i/N))^N - 1.

All of these answers.

Question 8 (1 point)

Which of the following is a cost to the investor that is included in the calculation of an investment's interest rate?

Question 8 options:

Inflation

Opportunity Cost.

Risk of a bad investment.

All of these answers.

Question 9 (1 point)

In a year, you expect to receive a payment of $1 million in a year. That annual interest rate is 5%. What is the present value of the future payment?

Question 9 options:

$952,381

$995,025

$666,667

$1,050,000

Question 10 (1 point)

A period of three consecutive months (1/4 of a year).

Question 10 options:

a quarter

perpetuity

annuity

discounting

Question 11 (1 point)

A security offers to pay the holder $1000 at the end of every month for five years. What type of annuity is this?

Question 11 options:

Ordinary annuity.

Perpetuity.

Annuity-due.

Regular annuity.

Question 12 (1 point)

Which of the following is a definition for the term "real interest rate"?

Question 12 options:

All of these answers.

The rate of return that capital could earn in an alternative investment of equivalent risk.

The amount of interest actually accrued in a given period.

The interest rate accrued after accounting for inflation.

Question 13 (1 point)

Which of the following is a definition for cost of capital?

Question 13 options:

The amount of interest actually accrued in a given period.

All of these answers.

The rate of return that capital could earn in an alternative investment of equivalent risk.

The interest rate accrued after accounting for inflation.

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