TIME VALUE OF MONEY

The formula for compound value is :

• FVn = PV (1+i)

• FVn = PV/(1+i)

• FVn = PV (1+i)ⁿ

• FVn = (1+i)/PV

What is the future value of $1000 compounded annually at 8% for five years ?

• $1,080

• $1,400

• $1,469

• $1,800

Konsep nilai waktu uang adalah uang yang ada saat ini, nilainya sama dengan uang yang akan diterima masa mendatang

• Benar

• Salah

Computing the future value of an amount of money for any specified time period requires knowledge of the amount of principal and the interest rate

• True

• False

Nilai FVIF besarnya

• lebih dari 1

• kurang dari 1

• sama dengan 1

The more frequently interest is compounded the greater the future value

• True

• False

Present value interest factor (PVIF) are usually less than 1.0

• True

• False

What is the present value of a ten year $1000 ordinary annuity discounted at 6% ?

• $4886

• $6145

• $7360

• $10000

Parents want to save $100,000 for their child's education. They plan to make fifteen equal year end payments and expect to earn an 8% annual interest rate. How much will they have to invest annually to accumulate the $100,000 ?

• $2,542

• $3,683

• $6,139

• $7,285

If you borrowed $120,000 to buy a hous and financed it at 10% annual interest for thirty years, what is your annual mortgage payment assuming that you make equal year end payment?

• $4000

• $3500

• $5336

• $12729