Time Value of Money

The amount money a person expects to have in the future is called

• Principal
• Future Value
• Simple Interest
• Present Value

Earning interest on interest is called

• Extra Interest
• Simple Interest
• Inflation Interest
• Compound Interest

The idea that money to be paid out or received in the future is not equivalent to money paid out or received today

• SMART Money
• Time Value of Money
• PV/FV Money
• Compound Money

You invest $475 in an account that pays 3% simple interest annually.  How much money do you have after five years? 

• $546.24
• $544.46
• $543.25
• $546.25

You invest $800 in an account that pays 6% interest, compounded annually.  How much money do you have after five years?  Round your answers to the nearest cent. 

• $898.09
• $1070.58
• $1710.58
• $975.68

Steady rise in the general level of prices is known as

• Inflation
• Interest
• Time Value of Money
• Principal

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

• True

• False

The more frequently interest is compounded the greater the future value

• True

• False

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

It is defined as,

"The process of accumulating interest on an investment over time to earn more interest."

• Compounding

• Future Value

• Simple Interest

• Present Value