When using a financial calculator, which of the following is a correct way to find the future value of $200 deposited today in an account for four years paying annual interest of 2% compounded quarterly?
A) N=16, i=.005, PV=200, PMT=0, solve for FV
B) N=4, i=.5, PV=200, PMT=0, solve for FV
C) N=16, i=.5, PV=-200, PMT=0, solve for FV
D) N=16, i=.03, FV=-200, PMT=0, solve for PV
When using EXCEL to find the future value of $2,000 invested in an account that would earn interest of 7.5% for 18 years, the correct entry would be
A) =FV(7.5,18,0,-1,000)
B) =PV(.075,18,0,-1,000)
C) =FV(7.5,18,0,1,000)
D) =FV(.075,18,0,-1,000)
When using a financial calculator, which of the following is a correct way to find the future value of $200 deposited today in an account for four years paying annual interest of 2% compounded quarterly?
A) N=16, i=.005, PV=-200, PMT=0, solve for FV
B) N=4, i=.5, PV=$200, PMT=0, solve for FV
C) N=16, i=.5, PV=-200, PMT=0, solve for FV
D) N=16, i=.03, FV=200, PMT=0, solve for PV
If you purchased a share of Mico.com stock on March 1, 1993 for $45 and you sold the stock at $168 on February 28, 1998, what was your annual rate of return on the stock?
A) 83%
B) 75%
C) 20%
D) 30%
E) 50%
At 8%, compounded annually, how long will it take $750 to double?
A) 9 years
B) 8 years
C) 12 years
D) 4 years
E) 6 years
The future value of a lump sum deposited today increases as the number of years of compounding at a positive rate of interest declines.
Answer: FALSE
If we invest money for 10 years at 8% interest, compounded semi-annually, we are really investing money for 20 six-month periods, during which we receive 4% interest each period.
Answer: TRUE
Determining the specified amount of money that you will receive at the maturity of an investment is an example of a future value equation.
Answer: TRUE
When performing time value of money computations with a financial calculator or EXCEL, PV and FV must have opposite signs.
Answer: TRUE
Assuming equal annual rates, the more frequent the compounding periods in a year, the higher the future value.
Answer: TRUE
