10. Time Value of Money

What is the primary purpose of interest in the context of time value of money equations?

Which of the following is true for calculating the future value of multiple cash flows?

How many years will it take for \$20 to grow to \$100 if the simple interest rate is 4\% per year?

Which one of the following methods of analysis ignores the time value of money?

If you desire your savings to double in 6 years, which annual interest rate, compounded annually, is closest to what you need?

Inga took out a \$10,000 loan at an annual interest rate of 6%, to be repaid in equal annual installments of \$1,500. After making payments for 4 years, how many more years will it take Inga to fully pay off the loan?

A project has the following cash flows:\[\begin{align*}\text{Year 0:} & \ -\$10,000 \\\text{Year 1:} & \ +\$4,000 \\\text{Year 2:} & \ +\$4,000 \\\text{Year 3:} & \ +\$4,000 \end{align*}\]What is the internal rate of return (IRR) for this project (rounded to the nearest whole percent)?

A certificate of deposit pays a higher interest rate than a savings account because the money is:

What is the present value of \$100 to be received in 8 years if the annual interest rate is 5\% compounded annually?

Ava charges \$1,200 to her credit card, which has an annual interest rate of 18% compounded monthly. If she pays off the entire balance in 11 months, how much total interest will she pay?

If you borrowed \$4,500 at an annual interest rate of 9.5\% for 1 year with a single payment due at the end of the year, what is the total amount you must repay at the end of the year?

If \$1 is invested today at an annual interest rate of 3.5\% compounded annually, how much will it be worth after 75 years?

Which of the following is an example of an annuity?

What is the future value of \$100 compounded annually for 50 years at an annual interest rate of 10\%? (Use the formula: \( FV = PV \times (1 + r)^n \))

The taxable portion of each annuity payment is calculated using which method?