Question 1

An individual is planning to set-up an education fund for his grandchildren. He plans to invest $10,000 annually at the end of each year. He expects to withdraw money from the fund at the end of 10 years and expects to earn an annual return of 8%. What will be the total value of the fund at the end of 10 years? (PV of $1, FV of $1, PVA of $1, and FVA of $1)  (Use appropriate factor(s)  from the tables provided.)

Accepted Answer

A)   $46,320
B)   $67,107
C)   $100,000
D)   $144,866
E)   $215,890F) All of the above
G) A) and B)

Question 2

Patricia wants to invest a sum of money today that will yield $10,000 at the end of 6 years. Assuming she can earn an interest rate of 6% compounded annually, how much must she invest today? (PV of $1, FV of $1, PVA of $1, and FVA of $1)  (Use appropriate factor(s)  from the tables provided.)

Accepted Answer

A)   $7,050
B)   $9,400
C)   $6,000
D)   $8,836
E)   $8,306F) A) and E)
G) C) and D)

Question 3

Garcia Brass Fixtures is planning on replacing one of its machines in five years by making a one-time deposit of $20,000 today and four yearly contributions of $5,000 beginning at the end of year 1. The deposits will earn 10% interest. How much money will Garcia have accumulated at the end of five years to replace the machine?

Accepted Answer

The answer of Garcia Brass Fixtures is planning on replacing...

Question 4

The present value of $5,000 per year for three years at 12% compounded annually is $12,009. (PV of $1, FV of $1, PVA of $1, and FVA of $1) (Use appropriate factor(s) from the tables provided.)

Accepted Answer

A) True 
 B)False

Exam 14: Time Value of Money

Correct Answer
verified

The present value of $5,000 per year for three years at 12% compounded annually is $12,009. (PV of $1, FV of $1, PVA of $1, and FVA of $1) (Use appropriate factor(s) from the tables provided.)

Correct Answer
verified

Correct Answer
verified

Patricia wants to invest a sum of money today that will yield $10,000 at the end of 6 years. Assuming she can earn an interest rate of 6% compounded annually, how much must she invest today? (PV of $1, FV of $1, PVA of $1, and FVA of $1) (Use appropriate factor(s) from the tables provided.)

Correct Answer
verified

Exam 14: Time Value of Money

Correct AnswerverifiedShow Answer

The present value of $5,000 per year for three years at 12% compounded annually is $12,009. (PV of $1, FV of $1, PVA of $1, and FVA of $1) (Use appropriate factor(s) from the tables provided.)

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Patricia wants to invest a sum of money today that will yield $10,000 at the end of 6 years. Assuming she can earn an interest rate of 6% compounded annually, how much must she invest today? (PV of $1, FV of $1, PVA of $1, and FVA of $1) (Use appropriate factor(s) from the tables provided.)

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified