TrueFalse

OO1. Other things equal, the longer the wait, the greater the future value will be.

OO2. Future value and interest rate are positively related.

OO3. This chapter does not examine investments with multiple payments.

OO4. What deposit is needed to reach $10,000 after 10 years if r = 5% is a future value problem.

OO5. "Discounting" is more likely a reference to future value than to present value.

OO6. Present value and interest rate are negatively related.

OO7. Interest rate and future value interest factor are not used interchangeably.

OO8. Discount rate and present value interest factor are not used interchangeably.

OO9. According to the Rule of 72, it will take more than 10 years to double your money if r = 8%.

OO10. "Interest rate" and "growth rate" can be used interchangeably.

OO11. Among the four methods discussed in this chapter, the table method was considered the most desirable.

OO12. Other things equal, the shorter the wait, the greater the present value will be.

OO13. If PV = $100, n = 5 and r = 10%, the FV < $150.

OO14. In #13, the FVIF > 1.55.

OO15. If FV = $500, n = 8 and r = 11%, PV < $220

OO16. In #15, the PVIF < 0.55.

OO17. If r > 0% and n > 0, PVIF < 1.

OO18. If r > 0% and n > 0, FVIF < 1.

OO19. If PV = $100, FV = $200 and n = 20, r > 4%.

OO20. If PV = $100, FV = $200 and r = 7%, n < 10.