Quiz Ch 05 – Present Value and Interest Rates
Fundamentals of Corporate Finance
Ross, Westerfield, and Jordan
13th Edition
Assuming all other variables remain constant, which option will result in the smallest present value for a lump sum?
Assuming all other variables remain constant, which option will result in the smallest present value for a lump sum?
What variable represents the exponent in the present value formula?
Given that a loan has an Annual Percentage Rate (APR) of 8.5 percent and an Effective Annual Rate (EAR) of 8.5 percent, which of the following must be true about the loan?
To achieve a retirement goal of $2 million with a one-time lump-sum deposit, in which scenario can you deposit a smaller amount today: if you plan to retire sooner rather than later and earn a low or high rate of interest?
If $6,000 is deposited into a retirement savings account with an 8 percent annual interest rate compounded annually and no withdrawals will be made until retirement in 48 years, which statement is true?
In Canada, perpetuity is commonly known as:
How would you classify the annual scholarships provided by the Jones Brothers’ trust fund?
Hayley has won a lottery and will receive $1,000 per year for the next 30 years. What is the current value of her winnings called?
If you invest $100 in a savings account today, what term refers to the total value of this investment one year from now?
Eunchae invested $2,000 six years ago at 4.5 percent interest and spends all of her interest earnings. What type of interest is she earning on her investment?