to @ present value; PMT/ b. present value; PMT xi c. future value; PMT/ d. future value; PMT xi 2. A perpetuity has a cash flow of $18.75 and a discount rate of 6%. What is the value of the perpetuity? a. $187.50 b. $318.00 c. $66.67 d. none of the above 3. If an 8-year annuity due has a Future Value (FV) of $10,000 and the interest rate is 7%, what is the amount of each annuity payment? a. $926 - $950 b. $951 - $975 c. More than $975 d. $901 - $925 e. Less than $900 4. The process of finding present values is frequently called a. discounting b. leasing c. annualizing d. Compounding 5. The payment or receipt of equal amounts, at the end of a series of equal periods, for a specified amount of time is called a(n) a. simple interest b. annuity due c. ordinary annuity d. Perpetuity 6. When you purchased a car, you borrowed $20,000 from the bank and agreed to make monthly payments of $423.17 for 5 years. What rate of interest is the bank charging you? a. 9.82% b. 5.00% c. 25.39% d. 10.00% Page 2 of 12