1.For the diagram shown below, the respective values of n to calculate the present worth in
year 0 by the equation P0 = 100(P/A, 10%, n1)(P/F, 10%, n2) are
Sol: n1 = 6, n2 = 1.
2.When using compound interest factors in time value of money calculations throughout our
course, when using the F/A factor the F takes place , and when using the P/A
factor the P takes place .
Sol: at the same time as the last A; one period before the first A
3.An interest rate of 1% per month is the same as
Sol: nominal 12% per year, compounded monthly
4.The present worth of a deposit of $1,000 every six months, starting 6 months from now, for
10 years at a nominal interest rate of 10% per year, compounded semiannually is
represented by which of the following equations
Sol: P = 1,000 (P/A, 5%, 20).
5.If you make quarterly deposits for three years (beginning one quarter from now) into an
account that compounds interest at 1% per month, the value of n in the F/A factor (for
determining F at the end of the 3-year period), is
Sol: 12
6.In order to establish a contingency fund to replace equipment after unexpected
breakdowns, a manufacturer of thin-wall plastic bottles plans to deposit $100,000 now and
$150,000 two years from now into an investment account. Assuming the account grows at
15% per year, the equation that does not represent the future value of the account in year
5.
Sol: F = 100,000(F/P, 15%, 5) + 150,000(F/P, 15%, 2).
7.Assume you make weekly deposits of $200 starting one week from now into an account
that pays 13% per year, compounded weekly. If you want to know how much you will have
after four years, the value of i you should use in the F/A factor is.
Sol: 0.25%
8.A uniform series of payments begins in year four and ends in year 11. If you use the P/A
factor with n = 8, the P value you get will be located in year
Sol: 3
9.For the cash flows shown, you have been asked to calculate the present worth (in year 0)
using i = 10% per year. Which of the following solutions is not correct?
Sol: P = 200(P/A, 10%, 4) + 300(P/A, 10%, 3)(F/P, 10%, 3).
10.A manufacturer of prototyping equipment wants to have $3,000,000 available 10 years
from now so that a new product line can be initiated. If the company plans to deposit
money each year, starting one year from now, the equation that represents how much the
company is required to deposit each year at 10% per year interest to have the $3,000,000
immediately after the last deposit is
Sol: 3,000,000(A/F, 10%, 10).
Other Links:
Statistics Quiz
Networking Quiz
See other websites for quiz:
Check on QUIZLET
Check on CHEGG