Question 1

The formula for the Present Value Interest Factor of an Annuity (PVIFA)is $\frac { ( 1 + r ) ^ { n } - 1 } { r }$ .

Accepted Answer

A) True 
 B)False

Question 2

If you borrow $5,000 at an annual interest rate of 9.0% for six years,what will your repayment(s)be if this is an interest-only loan?

Accepted Answer

Annual payments for the first five years...

Question 3

You have the opportunity to purchase mineral rights to a property in Wyoming with expected annual cash flows of $8,000 per year for ten years.If you discount these cash flows at a rate of 12% per year,what are these cash flows worth today if the cash flows occur at the end of each period?

Accepted Answer

A)  $45,201.78
B)  $49,676.40
C)  $80,000.00
D)  $122,996.93E) A) and D)
F) All of the above

Question 4

Given a positive interest rate and a positive cash flow,an ordinary annuity always has a greater future value than an annuity due of the same size and number of cash flows.

Accepted Answer

A) True 
 B)False

Question 5

Present values and interest rates are inversely related.This means that if you deposit $1,000 into an interest-earning account today,it will take longer to reach a future value of $5,000 at an interest rate of 6% than at a rate of 4%.

Accepted Answer

A) True 
 B)False

Question 6

Which is greater,the present value of a $1,000 five-year ordinary annuity discounted at 10%,or the present value of a $1,000 five-year annuity due discounted at 10%?

Accepted Answer

A)  The ordinary annuity is worth more with a present value of $3,790.79.
B)  The annuity due is worth more with a present value of $4,169.87.
C)  The ordinary annuity is worth more with a present value of $4,169.87.
D)  The annuity due is worth more with a present value of $4,586.85.E) A) and C)
F) C) and D)

Exam 4: The Time Value of Money Part 2

Which is greater,the present value of a $1,000 five-year ordinary annuity discounted at 10%,or the present value of a $1,000 five-year annuity due discounted at 10%?

Correct Answer
verified

Present values and interest rates are inversely related.This means that if you deposit $1,000 into an interest-earning account today,it will take longer to reach a future value of $5,000 at an interest rate of 6% than at a rate of 4%.

Correct Answer
verified

If you borrow $5,000 at an annual interest rate of 9.0% for six years,what will your repayment(s)be if this is an interest-only loan?

Correct Answer
verified
Annual payments for the first five years...
View Answer

The formula for the Present Value Interest Factor of an Annuity (PVIFA)is $\frac { ( 1 + r ) ^ { n } - 1 } { r }$ .

Correct Answer
verified

You have the opportunity to purchase mineral rights to a property in Wyoming with expected annual cash flows of $8,000 per year for ten years.If you discount these cash flows at a rate of 12% per year,what are these cash flows worth today if the cash flows occur at the end of each period?

Correct Answer
verified

Given a positive interest rate and a positive cash flow,an ordinary annuity always has a greater future value than an annuity due of the same size and number of cash flows.

Correct Answer
verified

Exam 4: The Time Value of Money Part 2

Which is greater,the present value of a $1,000 five-year ordinary annuity discounted at 10%,or the present value of a $1,000 five-year annuity due discounted at 10%?

Correct AnswerverifiedShow Answer

Present values and interest rates are inversely related.This means that if you deposit $1,000 into an interest-earning account today,it will take longer to reach a future value of $5,000 at an interest rate of 6% than at a rate of 4%.

Correct AnswerverifiedShow Answer

If you borrow $5,000 at an annual interest rate of 9.0% for six years,what will your repayment(s)be if this is an interest-only loan?

Correct AnswerverifiedAnnual payments for the first five years...View AnswerShow Answer

The formula for the Present Value Interest Factor of an Annuity (PVIFA)is (1+r)n−1r\frac { ( 1 + r ) ^ { n } - 1 } { r }r(1+r)n−1​ .

Correct AnswerverifiedShow Answer

You have the opportunity to purchase mineral rights to a property in Wyoming with expected annual cash flows of $8,000 per year for ten years.If you discount these cash flows at a rate of 12% per year,what are these cash flows worth today if the cash flows occur at the end of each period?

Correct AnswerverifiedShow Answer

Given a positive interest rate and a positive cash flow,an ordinary annuity always has a greater future value than an annuity due of the same size and number of cash flows.

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
Annual payments for the first five years...
View Answer

The formula for the Present Value Interest Factor of an Annuity (PVIFA)is $\frac { ( 1 + r ) ^ { n } - 1 } { r }$ .

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified