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The Time Value of Money PRETEST

Authored by Dan Montgomery

Mathematics

11th - 12th Grade

CCSS covered

Used 11+ times

The Time Value of Money  PRETEST
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10 questions

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1.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

When she was 20, Liz started saving $6,000 a year for retirement. Her goal is to reach $100,000 in savings by the time she’s 30. Her account earns 8% interest per year, compounded annually.

Liz won't have saved $100,000 by age 30.

Liz will have saved $100,000 by age 30.

I don't have a clue!

I am Jake the PEG!

2.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

When she was 20, Liz started saving $6,000 a year for retirement. Her goal is to reach $100,000 in savings by the time she’s 30. Her account earns 8% interest per year, compounded annually.

She’ll fall short of

her goal by about $10,081.

She’ll fall short of

her goal by about

$13,081.

She will go to jail!

She will not pass!

3.

MULTIPLE CHOICE QUESTION

1 min • 1 pt

Sarah plans to buy a car in five years, so she invests $10,000. She receives an annual interest rate of 5%, compounded semiannually.

What’s the future value of the $10,000 investment in five years?

The $10,000 investment is worth $12,801

The $10,000 investment is worth $11,801

The $10,000 investment is worth $12,803

No Clue Really!

4.

FILL IN THE BLANKS QUESTION

1 min • 1 pt

Cassidy has saved $8,000 this year in an account that earns 9% interest annually.

Based on the rule of 72, it will take about (a)   years for her savings to double.

5.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

James wants to be able to make a $30,000 down payment on a new home in three years. If he can invest his savings in an account that earns 6% interest per year, compounded monthly, about how much will James need to deposit today to achieve his goal?

$25,002

$25,069

$25,189

$35,730

6.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

Ben sold his small online business for $100,000. The purchaser will pay him $20,000 today, then $20,000 every year for the next four years. Assume that Ben could invest a lump-sum payment today in an account yielding an interest rate of 4% annually. Find the total present value of all five payments.

$87,096

$88,384

$92,598

$93,964

7.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

Naomi’s parents want to have $50,000 saved for her college education. If they invest $20,000 today and earn 7% interest compounded annually, about how long will it take them to save the $50,000?

13.5 years

13.9 years

14.1 years

15.3 years

Tags

CCSS.HSF.LE.A.4

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