BUSN 5200 Week 7 Quiz

BUSN 5200 Week 7 Quiz | Webster University

Question 1

Level sets of frequent, consistent cash flows are called:

loans. 

budgets. 

annuities. 

bills.

Question 2

In order to discount multiple cash flows to the present, one would use:

the appropriate compound rate.  

the appropriate discount rate.  

the appropriate simple rate.  

the appropriate tax rate.

Question 3

Your credit rating and current economic conditions will determine

whether you get simple or compound interest  

how long compounding will affect you.  

how long discounting will affect you 

the interest rate that a lender will offer

Question 4

The present value of annuity payments made far into the future is:

worth very little today. 

worth much more today. 

valued as having no time value of money.  

. valued as worthless as their value is not determinable.

Question 5

When you get your credit card bill, if you make a payment larger than the minimum payment:

you are wasting your current consumption and making TVM not work for you. 

you will increase the payoff time.  

you will reduce the payoff time.  

you will not affect the payoff time

Question 6

What is the PV of a future sum if:

FV = 15000

# of periods = 12

Interest rate = 5%

Compounding times per period = 12

8427 

8162 

7995 

8242

Question 7

1 / 1 pts

What is the PV of a future sum if:

FV = 25000

# of periods = 15

Interest rate = 8%

Compounding times per period = 12

7229 

7559  

7963  

7624

Question 8

What is the future value of the following annuity?

# of periods = 10

Interest rate = 5.25%

Compounding times per period = 12

Cash flow (PMT) = 1000

Growth Rate = 3%

# of payments per period = 12

This is an ordinary annuity

1288681 

1176802 

1236469 

1326114

Question 9

1 / 1 pts

What is the future value of the following annuity?

# of periods = 10

Interest rate = 5.25%

Compounding times per period = 12

Cash flow (PMT) = 1000

Growth Rate = 3%

# of payments per period = 12

This is an annuity due

1263540  

1288681 

1294319  

1273578

Question 10

A Webster University student recently graduated from a Masters Program, obtained a good job and is buying a car.  What is the total amount the Webster Student can afford if:

Payments need to be 350 per month

Term is 48 months

Interest rate (a special rate if they buy today) = 1%  

16461 

15291 

18265  

17295

Question 11

A Webster University student recently graduated from a Masters Program, obtained a good job and is buying a car.  What is the total amount the Webster Student can afford if:

Payments need to be 350 per month

Term is 60 months

Interest rate (a special rate if they buy today) = 1%

16461  

15291 

20475 

18265

Question 12

If the annual interest rate is 3.25% compounded monthly (12 times per year), what is the effective annual interest rate?

3.29 

3.32 

3.25 

3.52

Question 13

If the annual interest rate is 6.25% compounded monthly (12 times per year), what is the effective annual interest rate?

6.29  

6.35 

6.86  

6.43