10. Time Value of Money

What is the future value of \$1,000 invested for 8 years at an annual interest rate of 6%, compounded annually?

Approximately what annual interest rate, compounded annually, is needed to double an investment in 5 years?

What is the present value (PV) of the following set of cash flows, discounted at an annual rate of 8\%? - Year 1: \$1,000- Year 2: \$1,500- Year 3: \$2,000\[PV = \frac{1,000}{(1+0.08)^1} + \frac{1,500}{(1+0.08)^2} + \frac{2,000}{(1+0.08)^3}\]Which of the following is closest to the correct present value?

Which of the following best measures the risk or uncertainty associated with the time value of money in financial calculations?

Which of the following varies directly with the interest rate in time value of money calculations?

What is the future value of \$2,000 deposited for one year at an annual interest rate of 6% compounded once per year?

Noah paid off a loan with a simple interest rate of 9.7\% for 4 months. What was the annual percentage rate (APR) for the loan?

Interest is usually associated with which of the following financial concepts?

Future cash flows expected from investment projects should be:

Which of the following equations correctly calculates the future value (FV) of \$15,000 invested at an annual interest rate of 15% compounded annually for 5 years?

Given a money factor of 0.0027 for a lease, what is the approximate annual interest rate?

You pay \$9,850 for a 180-day Treasury bill (T-bill) with a face value of \$10,000. What is the annualized discount rate (using a 360-day year) for this T-bill?

Which term describes the process of paying off a debt with a fixed payment plan over a specific period of time?

An immediate annuity consists of a series of:

What is the present value (PV) of the following set of cash flows, discounted at an annual rate of 8\%? \[\begin{align*}\text{Year 1:} & \quad \$1,000 \\\text{Year 2:} & \quad \$1,500 \\\text{Year 3:} & \quad \$2,000 \end{align*}\]Choose the closest answer.