FIN 370 Week 2 Assignment Help | University of phoenix
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- 02 Dec 2019
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FIN 370 Week 2 Assignment Help | University of phoenix
1.
What
is the future value of $2,500 deposited for one year earning a 14 percent
interest rate annually?
Multiple
Choice
o
$2,850
o
$3,150
o
$2,950
o
$2,550
2.
How
are future values affected by changes in interest rates?
Multiple
Choice
o
The higher the interest rate, the larger
the future value will be.
o
One would need to know the present value
in order to determine the impact.
o
The lower the interest rate, the larger
the future value will be.
o
Future values are not affected by changes
in interest rates.
Compute
the present value of $4,000 paid in five years using the following discount
rates: 10 percent in year 1, 2 percent in year 2, 12 percent in year 3, and 9
percent in years 4 and 5.
Multiple
Choice
o
$2,679.15
o
$2,362.19
o
$2,317.03
o
$2,206.81
4.
Approximately
what interest rate is needed to double an investment over eight years?
o
100 percent
o
12 percent
o
8 percent
o
9 percent
5.
When
calculating the number of years needed to grow an investment to a specific
amount of money
Multiple
Choice
o
the Rule of 72 is the only way to
calculate the time period needed to achieve the growth.
o
the interest rate has nothing to do with
the length of the time period needed to achieve the growth.
o
the lower the interest rate, the shorter
the time period needed to achieve the growth.
o
the higher the interest rate, the shorter
the time period needed to achieve the growth
6.
The
length of time of the annuity is very important in accumulating wealth within
an annuity. What other factor also has this effect?
Multiple
Choice
o
the present value
o
interest rate for compounding Correct
o
the time line
o
the future value
What
is the present value, when interest rates are 6.5 percent, of a $100 payment
made every year forever?
Multiple
Choice
o
$650.00
o
$1,538.46
o
$6.50
o
$1,000.00
8.
What
is the present value of a $600 annuity payment over 4 years if interest rates
are 6 percent?
Multiple
Choice
o
$757.49
o
$3,145.28
o
$475.26
o $2,079.06
9.
Loan amortization schedules show
Multiple
Choice
o
the interest paid per period only.
o
the principal balance paid per period
only.
o
both the principal balance and interest
paid per period. Correct
o
the present value of the payments due
10.
The
simple form of an annualized interest rate is called the annual percentage rate
(APR). The effective annual rate (EAR) is a
Multiple
Choice
o
measure that only applies to mortgages.
o
concept that is only used because the law
requires it, and is of no use to a borrower.
o
less accurate measure of the interest rate
paid for monthly compounding.
o
more accurate measure of the interest rate
paid for monthly compounding.
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