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Savings Account Quiz

A home mortgage loan and the related financial calculations are an example of _____.

All business investment decisions should be made on _____ .

Which of the following decisions can be made using time value of money problems?

Which of the following statements is false?

Which of the following statements is (are) false?

If you invest $1,000 for 3 years at 7% simple interest, how much will you have at the end of the 3 years?

If you invest $1,000 for 3 years at 7% compound interest, how much will you have at the end of the 3 years?

In a sinking fund, a firm makes a series of equal payments into a savings account in order to have a certain dollar amount available at some point in the future. What type of time value problem is this?

Assume you will work for the next 20 years and at the end of each year you will deposit $20,000 into a savings account. At the end of that 20 year period you will start withdrawing your retirement living expenses from that account at the beginning of every year. This financial plan involves a _____ problem while you are working and a _____ problem while you are in retirement.

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%?