WorksheetsTime value of money
Total questions: 18
Worksheet time: 20mins
The "time value of money" means that
money paid out today less value than if the money is paid out in the future
money received today is worth more than the same amount of money received in the future
the more time a person has to save, the lower the return on the money
the longer money is held, the less likely it will be spent
The amount of money a person expects to have in the future is called
Principal
Interest
Present value
Future value
Process of changing future value to the present value known as
Compound
Discount
Simple interest
Principal
Process of changing present value to the future value known as
Principal
Discount
Simple interest
Compound
Earning interest on interest is called
Extra interest
Inflation interest
Simple interest
Compound interest
Lisa wants to know what the value of her RM1,000 will be if she invests it for 3 years at a given rate. What is Lisa trying to find?
Present value
Future value
Effective annual rate (EAR)
Discount rate
Cash received today is preferred to cash received in the future
True
False
The formula for compound value is :
FVn = PV (1+i)
FVn = PV/(1+i)
FVn = PV (1+i)n
FVn = (1+i)/PV
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
The more frequently interest is compounded the greater the future value
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
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
The definition of annuity ?
A series of equal amount of payment /deposits made at equal intervals time
A series of equal amount of discount made at equal intervals time
A series of equal amount of annuity made at equal intervals time
A series of marvel movie !
