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Question 1
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The time value of money refers to the fact that a dollar received today is worth less than a dollar
promised at some time in the future.
True
False
Question 2
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Interest is the excess cash received or repaid over and above the amount lent or borrowed.
True
False
Question 3
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Simple interest is computed on principal and on any interest earned that has not been withdrawn.
True
False
Question 4
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Compound interest uses the accumulated balance at each year end to compute interest in the
succeeding year.
True
False
Question 5
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The future value of an ordinary annuity table is used when payments are invested at the beginning of
each period.
True
False
Question 6
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If the compounding period is less than one year, the annual interest rate must be converted to the
compounding period interest rate by dividing the annual rate by the number of compounding periods per
year.
True
False
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 Spring '10
 rishard

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