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Accounting 201
Name ___________________________
Chapter 6 Quiz
Present and future value tables of $1 at 3% are presented below:
1. Today Thomas deposited $100,000 in a three-year, 12% CD that compounds quarterly. What is the
maturity value of the CD?
A. $109,270.
B. $119,410.
C. $142,576.
D. $309,090.
2. Carol wants to invest money in a 6% CD account that compounds semiannually. Carol would like the
account to have a balance of $50,000 five years from now. How much must Carol deposit to accomplish
her goal?
A. $35,069.
B. $43,131.
C. $37,205.
D. $35,000.
3. Shane wants to invest money in a 6% CD account that compounds semiannually. Shane would like the
account to have a balance of $100,000 four years from now. How much must Shane deposit to accomplish
his goal?
A. $88,848.
B. $78,941.
C. $25,336.
D. $22,510.

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*Sign up* 4. Bill wants to give Maria a $500,000 gift in seven years. If money is worth 6% compounded
semiannually, what is Maria's gift worth today?
A. $ 66,110.
B. $ 81,310.
C. $406,550.
D. $330,560.
5. Monica wants to sell her share of an investment to Barney for $50,000 in three years. If money is worth
6% compounded semiannually, what would Monica accept today?
A. $ 8,375.
B. $41,874.
C. $11,941.
D. $41,000.
6. At the end of the next four years, a new machine is expected to generate net cash flows of $8,000,
$12,000, $10,000, and $15,000, respectively. What are the cash flows worth today if a 3% interest rate
properly reflects the time value of money in this situation?
A. $41,556.
B. $47,700.
C. $32,400.
D. $38,100.
7. At the end of each quarter, Patti deposits $500 into an account that pays 12% interest compounded
quarterly. How much will Patti have in the account in three years?
A. $7,096.
B. $7,013.
C. $7,129.
D. $8,880.
8. Sondra deposits $2,000 in an IRA account on April 15, 2009. Assume the account will earn 3%
annually. If she repeats this for the next nine years, how much will she have on deposit on April 14, 2019?
A. $20,600.
B. $20,728.
C. $23,616.
D. $24,715.
9. Shelley wants to cash in her winning lottery ticket. She can either receive ten, $100,000 semiannual
payments starting today, or she can receive a lump-sum payment now based on a 6% annual interest rate.
What is the equivalent lump-sum payment?
A. $853,020.
B. $801,971.
C. $744,090.
D. $878,611.

10. On January 1, 2009, you are considering making an investment that will pay three annual payments of
$10,000. The first payment is not expected until December 31, 2011. You are eager to earn 3%. What is the
present value of the investment on January 1, 2009?
A. $26,662.
B. $27,462.
C. $28,286.
D. $29,135.

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