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WorksheetsTIME VALUE OF MONEY
Total questions: 10
Worksheet time: 6mins
Which does not belong to the group?
Future Value
Time
Discount Rate
Present Value
Interest
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
It is defined as.
"Interest earned only on the original principal amount invested."
Compound Interest
Simple Interest
Interest on Interest
Compounding
True or False.
The future value increases as you increase the time to the future.
TRUE
FALSE
TRUE OR FALSE.
The present value increases as you increase the time between the future value date and the present value date.
TRUE
FALSE
When a lottery price is offered as $10,000,000 but will pay out a series of $250,000 payments over forty years, is it really a $10,000,000 lottery prize?
YES
NO
What is the interest rate of 15% in four years?
.8227
.6830
.5718
.4823
Suppose you need $200 to buy textbooks next year. You can earn 5 percent on your money. How much do you have to put up today?
Answer needs to have two decimal points.
190.35
190.64
190.51
190.48
The rate used to calculate the present value of future cash flows, is known as
Discount Cash Flow
Discount Rate
Discount
Present Value
TRUE OR FALSE.
The time value of money is the concept that a sum of money is worth more now than the same sum will be at a future date due to its earnings potential in the interim.
TRUE
FALSE
