1. Which statement about present value calculations is true?

a) present value is only used in banking for mortgages payable

b) an account valued primarily with present value is inventory

c) the time value of money is not part of present value calculations

d) present value calculations are used in accounting and finance applications

The best example of an annuity is:

a) the interest rate assumed

b) an inheritance received with just one check

c) the purchase price for a car that is paid entirely in cash at one time

d) the monthly payment required for a car loan

The best example a single amount or a single sum is:

a) you will get $4,000 every 3 months for 7 years

b) you will get monthly social security payments when you retire

c) you will get one payment of $50,000 at the end of 5 years

d) you will get an interest rate