Question 1

If you know the future value or worth of something and would like to know what its present value or worth is, which interest factor could you use?

Present worth factor for a uniform series

Capital recovery factor

Present worth factor for a single payment

Compound amount factor

Question 2

If you are given a series of payments into the future and want to know their present value or worth, what is the best interest factor to use?

Present worth factor of an annuity

Capital recovery factor

Sinking fund factor

Compound amount factor

Question 3

This rate is applied against an investments return, reflecting economic conditions and giving a more realistic perspective on its return.

discount rate

inflation rate

MARR

IRR

Question 4

You want to accumulate $600,000 in a savings account in 25 years. If the bank pays 3% compounded annually, how much should you deposit in the account?

F = $600,000

N = 25 years

i = 3%

P = ?

$204,650

$325,000

286,563

$116,499

Question 5

True or false? Compounding pays interest on principal and accrued interest to give a higher return than simple interest which pays interest only on the principal amount.

True

False

Question 6

If you know what a series of payments are and want to know what their future value is, which interest factor should you use?

Present worth factor

Capital recovery factor

Sinking fund factor

Compound Amount Factor

Question 7

If your credit card's APR is 24% compounded daily, what is the effective annual interest rate that you are paying?

24%

27%

27.11%

24.27%

Question 8

What is the stated rate or the actual rate paid to lenders?

nominal rate

effective rate

real interest rate

simple interest

Question 9

What is the future value eight years from now of $35,000 invested today at a periodic interest rate of 12% compounded annually?

P =35,000

n = 8

i = 12%

F= ?

$35,000

$39,200

$86,658

$313,600

Question 10

This is the rate of return an investment needs to make to meet an owners standards given risk and the opportunity cost of forgoing other investment opportunities.

discount rate

inflation rate

MARR

IRR