chapter5

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Question 1 1 out of 1 points Which of the following is a reason you would prefer a dollar today over a dollar tomorrow? Selected Answer: Correct Answer: Question 2 1 out of 1 points To find the present value of a future value, you would discount the future value; to find the future value of a present value, you would compound the present value. Selected Answer: Correct Answer: Question 3 1 out of 1 points If a present value of \$100 is to be compounded for five years at a discount rate of 5%, the future value (i.e. at the end of five years) will be __________. Selected Answer:

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Correct Answer: Question 4 1 out of 1 points If future value is "FV", present value is "PV", and the discount rate is "i", then to compound a single sum you would use the equation FV = (PV)(i) (Hint: Remember that if "i" were 5%, for example, then "i" above would be . 05) Selected Answer: Correct Answer: Question 5 1 out of 1 points An annuity is __________.

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Unformatted text preview: __________. Selected Answer: Correct Answer: Question 6 1 out of 1 points In the context of interest rates, APR stands for __________. Selected Answer: Correct Answer: Question 7 1 out of 1 points What is the relationship between annuities and perpetuities? Selected Answer: periods. Correct Answer: periods. Question 8 1 out of 1 points The present value of a perpetuity equals the payment amount divided by the interest rate (i.e. discount rate). (Hint: Remember that if the interest rate were 5%, then you would plug it into the equation above as "0.05") Selected Answer: Correct Answer: Question 9 1 out of 1 points Subjects such as investing, borrowing and lending, and retirement planning heavily involve the concept of the time value of money. Selected Answer: Correct Answer: Question 10 1 out of 1 points The "discount rate" can also be referred to as the __________. Selected Answer: Correct Answer:...
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