Business Finance - Quiz #3

What is the formula to calculate the future value of a sum of money?

• FV = PV × (1 + r)^t

• PV = FV × (1 - r)^t

• FV = PV × (1 - r)^t

• PV = FV × (1 + r)^t

Which factor in the future value formula represents the annual interest rate?

• FV

• PV

• r

• t

In the present value formula, what does 'r' represent?

• The number of years

• The initial amount of money

• The annual interest rate

• The future value of money

What does the 't' represent in the present value formula?

• The initial principal

• The annual interest rate

• The number of years

• The future value of money

Which of the following types of loans is typically used for financing a home purchase?

• Personal Loan

• Auto Loan

• Mortgage Loan

• Payday Loan