Time Value of Money Quiz

What is the first step in time value analysis?

• Determining cash flows

• Setting up a timeline

• Calculating future value

• Finding present value

What does PV stand for in financial terms?

• Potential Value

• Past Value

• Projected Value

• Present Value

What is the formula for Future Value (FV)?

• FV = PV(1 + I)^N

• FV = PV - I * N

• FV = PV + I * N

• FV = I / PV

What is the interest rate used in the example provided?

• 7%

• 10%

• 5%

• 3%

What is compounding?

• Calculating present value

• Increasing the value of an asset due to interest

• Decreasing the value of an asset

• Finding cash flows

What is an annuity?

• A series of equal payments at fixed intervals

• A loan with variable payments

• A one-time payment

• A type of investment

What is the future value of an ordinary annuity formula?

• FVA = PMT * I * N

• FVA = PMT - I

• FVA = PMT[(1 + I)^N - 1] / I

• FVA = PMT + I

What is the present value of a perpetuity formula?

• PV = PMT / I

• PV = PMT * I

• PV = PMT + I

• PV = PMT - I

What does CF represent in financial terms?

• Cost Factor

• Credit Facility

• Capital Fund

• Cash Flow

What is the total interest earned in the example?

• P50.00

• P200.00

• P157.63

• P100.00