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Time-value of money test

Click on the correct answer


1	1) What is the present value of $8,000 to be paid at the end of three years if the correct risk adjusted interest rate is 11%?
		$5,850
		$4,872
		$6,725
		$1,842
		$1,500

2	What is the present value of $1,000 to be paid at the end of 5 years if the correct risk adjusted interest rate is 8%
		$681
		$1,462
		$322.69
		$401.98
		None of the above

3	What is the present value of $6,500 to be paid at the end of 8 years if the correct risk adjusted interest rate is 10%?
		$3,032
		$3,890
		$3,190
		$4,301
		$2,021

4	The "Rule of 72" says that if you earn 8% per year, your money will double in ___ years.
		12
		6
		8
		9
		72

5	What is the present value of $717 to be paid at the end of 2 years if the correct risk adjusted interest rate is 9%?
		$604
		$417
		$715
		$1,062
		$556

6	What is the present value of $53,000 to be paid at the end of 15 years if the correct risk adjusted interest rate is 9%?
		$25,300
		$34,122
		$14,549
		$11,989
		none of the above

7	What is the present value of an annuity that pays 100 per year for 10 years if the required return is 7%?
		$1000
		$702.40
		$545.45
		$13,816
		none of the above

8	An annuity due is always worth _____ than a comparable annuity.
		less
		more
		the same as
		can not tell


9	As interest rates go up, the present value of a stream of fixed cash flows _____.
		goes down
		goes up
		stays the same
		can not tell


10	What is the present value of $3,500,000 to be paid at the end of 50 years if the correct risk adjusted interest rate is 18%?
		$105,000
		$3,500,000
		$1,500,000
		$,3975,000
		$1,050

11	What is the implied discount rate of a perpetuity that pays $5 and has a present value of $60? (Choose the closest answer)
		12%
		5%
		8.33%
		14%
		16%

12	Another name for a perpetuity is a consol. (true or false)
		True
		False




13	You invested $1,000 five years ago in Mamsco Industries stock. If your MAMSCO stock is worth $1,338 today, what is your annual implied rate of return? a. 9.2% b. 10.0% c. 3.5% d. 8.2% e. 5.0%
		10%
		33.8%
		4%
		6%
		9%

14	How much must you set aside today to have $2000 in six years if you earn 12% on your money?
		$1013
		$888
		$756
		$873
		$476

15	What is the value of a perpetuity of $400 a year is the required return is 10%
		$3,500
		$4000
		$14,500
		$3,200
		$40,000

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