Quiz 4 - fin

Question 2 0 out of 2 points in future value or

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Question 2 0 out of 2 points In future value or present value problems, unless stated otherwise, cash flows are assumed to be Answer Selected Answer: Correct Answer: at the end of a time period. Question 3 0 out of 2 points The present value of a \$20,000 perpetuity at a 7 percent discount rate is Answer Selected Answer: Correct Answer: \$285,714. Question 4 0 out of 2 points

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The rate of interest actually paid or earned, also called the annual percentage rate (APR), is the ________ interest rate. Answer Selected Answer: Correct Answer: effective. Question 5 0 out of 2 points The interest rate determined by multiplying the interest rate charged per period by the number of periods in a year is called the: Answer Selected Answer: Correct Answer: annual percentage rate Question 6 0 out of 2 points When the amount earned on a deposit has become part of the principal at the end of a specified time period the concept is called Answer
Selected Answer: Correct Answer: compound interest. Question 7 0 out of 2 points An investment will mature in 20 years. Its maturity value is \$1,000. If the discount rate is 7%, what is the present value of the investment? Answer Selected Answer: Correct Answer: \$258 Question 8 0 out of 2 points Cecilia bought 100 shares of Minnesota Mining and Manufacturing in June, 1987 for \$38 a share for a total investment of \$3,800. She sold the shares in June, 1996 for \$8,960. What is Cecilia’s annual rate of return on her investment? Answer Selected Answer:

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Correct Answer: 10% Question 9 0 out of 2 points Consolidated Freightways is financing a new truck with a loan of \$60,000 to be repaid in six annual end-of-year installments of \$13,375. What annual interest rate is Consolidated Freightways paying? Answer Selected Answer: Correct Answer: 9% Question 10 0 out of 2 points You have just won a lottery! You will receive \$50,000 a year beginning one year from now for 20 years. If your required rate of return is 10%, what is the present value of your winning lottery ticket? Answer
Selected Answer: Correct Answer: \$425,700 Question 1 0 out of 2 points The future value of \$100 received today and deposited at 6 percent for four years is Answer Selected Answer: Given] Correct Answer: \$126.

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