CVLIS - TVM - PRETEST

What does the Time Value of Money (TVM) principle state?

• Money depreciates over time

• Money has the same value regardless of when it is received or spent

• Money has greater value when received sooner rather than later

• Money has no value in the future

Which term refers to the process of determining the value of a future sum of money in today's terms?

• Present Value

• Future Value

• Discounting

• Compounding

If the interest rate increases, what happens to the present value of a future sum of money?

• It increases

• It decreases

• It remains the same

• It depends on the time period

Which factor has the most significant impact on the present value of a future sum of money?

• Time period

• Interest rate

• Type of currency

• Compounding frequency

Yuta puts Php100 in the bank for 2 years at 10% interest per annum. What is the Future Value?

• Php121

• Php100

• Php83

• Php110

How does compounding frequency affect the Time Value of Money?

• Higher compounding frequencies result in lower future values

• Higher compounding frequencies result in higher future values

• Compounding frequency has no effect on future value

• It depends on the interest rate

In Time Value of Money calculations, what does the future value represent?

• The value of money at the beginning of a period

• The value of money at the end of a period

• The value of money adjusted for inflation

• The value of money adjusted for compounding

Which term represents the initial amount of money invested or borrowed?

• Future Value

• Present Value

• Compound Amount

• Accumulated Value

What happens to the future value of an investment if you increase the time period?

• It increases

• It decreases

• It remains the same

• It depends on the interest rate

Your brother is expecting to get Php1000 in two years time after investing in the bank that yield 10% annually. Find the present value.

• Php826.45

• Php1,000

• Php1,010

• Php1,000.25