If you put $8,000 in a savings account today, how much will it grow to in 3 years if the bank pays 6% annual interest compounded continuously?
A company issues zero coupon bonds which mature in 30 years. These bonds can be bought for $99.38 and then pay no annual interest payments, only $1000 at maturity. What is the annual percentage cost of these bonds to the issuing company?
If you can invest $10,000 at a 7% annual rate, compounded monthly, how long will it take to have $13,050?
Which of the following statements is not true?
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The present value factor is also known as the discount factor. |
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The present value factor decreases as the interest rate increases. |
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The present value factor is the reciprocal of the future value factor. |
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The present value factor can be greater than 1. |
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Aaron earns 10% interest compounded annually on his savings. He will deposit $750 today, $825 one year from today, and $910 two years from today. What will be the account balance three years from today?
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The amount borrowed on a loan equals the
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compounded value of the loan payments |
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sum of the loan payments |
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discounted value of the loan payments |
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future value of the loan payments |
Which of the following examples represents a growing annuity?
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A share of preferred stock. |
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An inflation-adjusted 25-year lease. |
The EAR will equal the APR if interest is compounded
Which of the following is not a typical way in which interest rates are quoted in the marketplace?
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The quoted interest rate. |
Which of the following interest rates will result in the highest amount of interest being charged?
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7% per year, compounded daily. |
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7.5% per year, compounded quarterly. |
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8% per year, compounded annually. |
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7.8% per year, compounded daily. |
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