Free Printable Math Invest Week 13-14

1.

(PV, Ordinary Perpetuity, annual) A perpetuity of $5,000 per year beginning in 1 year is said to offer a 15% interest rate. What is its present value?

$PV_{OrdinaryPerpetuity\ }=\ \frac{PMT}{r}$ $PV_{PerpetuityDue\ }=\frac{PMT}{r}\cdot\left(1+r\right)\ or\ =\ PMT+\frac{PMT}{r}$ $PV_{UnevenCFs\ }=\frac{CF_1}{\left(1+r\right)^1}+\frac{CF_2}{\left(1+r\right)^2}+\frac{CF_3}{\left(1+r\right)^3}+...+\frac{CF_N}{\left(1+r\right)^N}$

a)

$33,333.33

b)

$37,681.16

c)

$38,333.33

d)

$65,217.39

2.

(PV, Perpetuity Due, annual)A perpetuity of $5,000 per year beginning today is said to offer a 15% interest rate. What is its present value?

$PV_{OrdinaryPerpetuity\ }=\frac{PMT}{r}$

$PV_{PerpetuityDue\ }=\frac{PMT}{r}\cdot\left(1+r\right)\ or\ =\ PMT+\frac{PMT}{r}$ $PV_{UnevenCFs\ }=\frac{CF_1}{\left(1+r\right)^1}+\frac{CF_2}{\left(1+r\right)^2}+\frac{CF_3}{\left(1+r\right)^3}+...+\frac{CF_N}{\left(1+r\right)^N}$

a)

$33,333.33

b)

$37,681.16

c)

$38,333.33

d)

$65,217.39

3.

(PV, Ordinary Perpetuity, annual)How much more is a perpetuity of $1,000 worth than an annuity of the same amount for 20 minutes? Assume a 10% interest rate and cash flows at end of period.
$PV_{OrdinaryPerpetuity\ }=\frac{PMT}{r}$

$PV_{PerpetuityDue\ }=\frac{PMT}{r}\cdot\left(1+r\right)\ or\ =\ PMT+\frac{PMT}{r}$ $PV_{UnevenCFs\ }=\frac{CF_1}{\left(1+r\right)^1}+\frac{CF_2}{\left(1+r\right)^2}+\frac{CF_3}{\left(1+r\right)^3}+...+\frac{CF_N}{\left(1+r\right)^N}$

a)

$297.29

b)

$1,486.44

c)

$1,635.08

d)

$2,000.00

4.

(NPV) What is the present value of the following payment stream, discounted at 9% annually: $1,400 at the end of year 1, $2,400 at the end of year 2, and $3,400 at the end of year 3?
$PV_{OrdinaryPerpetuity\ }=\frac{PMT}{r}$

$PV_{PerpetuityDue\ }=\frac{PMT}{r}\cdot\left(1+r\right)\ or\ =\ PMT+\frac{PMT}{r}$ $PV_{UnevenCFs\ }=\frac{CF_1}{\left(1+r\right)^1}+\frac{CF_2}{\left(1+r\right)^2}+\frac{CF_3}{\left(1+r\right)^3}+...+\frac{CF_N}{\left(1+r\right)^N}$

a)

$5,929.86

b)

$6,150.86

c)

$6,220.35

d)

$6,144.60

5.

(NPV) What is the present value of the following payment stream, discounted at 10% annually: $2,900 at the end of year 1, $3,900 at the end of year 2, and $4,900 at the end of year 3?
$PV_{OrdinaryPerpetuity\ }=\frac{PMT}{r}$

$PV_{PerpetuityDue\ }=\frac{PMT}{r}\cdot\left(1+r\right)\ or\ =\ PMT+\frac{PMT}{r}$ $PV_{UnevenCFs\ }=\frac{CF_1}{\left(1+r\right)^1}+\frac{CF_2}{\left(1+r\right)^2}+\frac{CF_3}{\left(1+r\right)^3}+...+\frac{CF_N}{\left(1+r\right)^N}$

a)

$9,856.50

b)

$9,773.85

c)

$9,781.37

d)

$9,540.95

6.

(NPV) What is the present value of the following payment stream, discounted at 9% annually: $2,100 at the end of year 1, $3,100 at the end of year 2, and $4,100 at the end of year 3?
$PV_{OrdinaryPerpetuity\ }=\frac{PMT}{r}$

$PV_{PerpetuityDue\ }=\frac{PMT}{r}\cdot\left(1+r\right)\ or\ =\ PMT+\frac{PMT}{r}$ $PV_{UnevenCFs\ }=\frac{CF_1}{\left(1+r\right)^1}+\frac{CF_2}{\left(1+r\right)^2}+\frac{CF_3}{\left(1+r\right)^3}+...+\frac{CF_N}{\left(1+r\right)^N}$

a)

$7,701.77

b)

$7,916.51

c)

$7,922.76

d)

$7,992.26

7.

What is compounding?

a)

Process of accumulated interest

b)

Cash value of the investment at some point in the future

c)

Interest compounded more often than once a year

d)

Current value of future cash flows discounted at the appropriate discount rate

8.

·

What is present value of money?

a)

Process of accumulated interest

b)

Cash value of the investment at some point in the future

c)

Interest compounded more often than once a year

d)

Current value of future cash flows discounted at the appropriate discount rate

9.

What is the special case of annuity which has cash flows that continue forever.....?

a)

Perpetuities

b)

Propensities

c)

Percerivables

d)

Postertuites

10.

· What is the name of the annuitites that usually have payments that grow over time?

a)

Preferred annuities

b)

Multiplied annuities

c)

Growing annuities

d)

Perpetuities

11.

The _________ the discount rate, the ________ the present value of a future cash flow?

a)

higher, lower.

b)

higher, higher

c)

lower, lower

d)

longer, shorter

12.

WHich financial statement allows you to know the total debt that the company has with a supplier?

a)

Income statement

b)

Balance sheet

c)

all of them

d)

none of them

13.

Does the heading (encabezado) of the Balance Sheet indicate……

a)

a period of time

b)

a point in time

c)

neither

d)

all of them

14.

It is a series of equal payments at regular intervals.

a)

Interest

b)

Annuity

c)

Logic

d)

Proposition

15.

Ordinary annuity is paid or received at the _______ of the time periods.

a)

beginning

b)

end

c)

middle

d)

quarter

16.

Annuity Due is an annuity that is paid or received at the ____________ of the time period

a)

end

b)

beginning

c)

middle

d)

quarter

17.

The term used for an annuity in which the number of compounding periods per year coincides with the number of annuity payments per year.

a)

Simple

b)

Regular

c)

General

d)

Value

18.

It is an annuity in which the annuity payments and compounding periods do not coincide.

a)

Simple

b)

General

c)

Regular

d)

Compound

19.

Another term used for Future Value of an Annuity which is the sum of the compound amount of all payments, compounded to the end of term

a)

Maturity Value

b)

Expanded

c)

Complicated Value

d)

Present Value

20.

Determine the present value on July 7 of P6,800 paid at the end of each subsequent calendar quarter for 7 years if money is worth 6% compounded quarterly. What is the type of annuity in the given?

a)

Simple

b)

General

c)

Deferred

21.

Eli has decided to make semiannually payments P7,800 at the end of every 6 months for 8 years into an investment that he thinks will yield 7% compounded semiannually. What lump sum deposited today will result to the same future value?

TYPE OF ANNUITY?

a)

Simple

b)

General

c)

Deferred

22.

What type of annuity is described in the given?

If P2,000 is invested at the end of every year at 8% compounded semiannually, what will be the total value of the periodic investments after 20 years?

a)

Simple

b)

General

c)

Deferred

23.

What is the type of annuity in the given problem?

What is the future value of an annuity of P48,000 per annum, for 5 years, at 15% interest compounded monthly?

a)

Simple

b)

General

c)

Deferred

24.

Which of the following statement best describe the principal amount?

a)

The amount paid or earned for the use of money.

b)

The amount of time in years the money is borrowed.

c)

The amount of money invested or borrowed.

d)

The amount that the lenders receives from the borrower.

25.

John decided to invest his P50,000 for 3.5 years to a lending firm. How much will he get if it will earn an annual interest rate of 6.5%?

a)

P 61,375.00

b)

P 11,375.00

c)

P 71,375.00

d)

P 21,375.00

26.

Which of the following illustrates the simple interest formula?

a)

P=P x r x t

b)

FV=P(1+rt)

c)

MV=F+I

d)

SI=P x r x t

27.

The correct formula to calculate the interest portion of a fixed rate loan payment is ________.

a)

FV = P + I

b)

A = P(1+r/n )^nt

c)

I = P x r x t

d)

None of the above

28.

A sequence of periodic payments paid or received at equal time interval.

a)

Bonds

b)

Stocks

c)

Loans

d)

Annuity

29.

An Annuity in which the payments are made at the end of each period.

a)

Simple Annuity

b)

General Annuity

c)

Ordinary Annuity

d)

Annuity Due

30.

An annuity whose periodic payments are made at beginning of each payment interval.

a)

Simple Annuity

b)

General Annuity

c)

Ordinary Annuity

d)

Annuity Due

31.

Which of the following statement is TRUE about bonds?

a)

Higher risk but with possibility of higher returns.

b)

Prices vary every day.

c)

A form of equity financing by allowing investors to be part of the company

d)

Can be appropriate for retirees or for those who need the money soon.

32.

This refers to the time when the insured or his beneficiary is entitled to receive the benefits provided in the contract.

a)

Maturity Value

b)

Maturity Date.

c)

Contract Date

d)

Payment Period

33.

Which of the following will be more advantageous to an investor or creditor and borrower now a days?

a)

Investing in a cooperatives tax exempt

b)

Investing in a bank with higher interest than cooperatives but not tax exempt

c)

Borrow from 5/6 since you will get money without any requirements

d)

Deposit in your piggy bank.

34.

What type of insurance is more expensive because the premium remains constant throughout the life of the insured?

a)

Whole Life Insurance

b)

Limited Payment Insurance

c)

Term Insurance

d)

Endowment Insurance

35.

What policy that gives lifetime protection to the policyholder although the premiums are paid for only a specified number of years?

a)

Whole Life Insurance

b)

Limited Payment Insurance

c)

Term Insurance

d)

Endowment Insurance

36.

It refers to the sum of all the periodic payments and the compound interest on them accumulated at the given interest rate from the time they are made up to the end of the term.

a)

Amount of an annuity

b)

Annuity

c)

Compound amount

d)

Final Amount

37.

The person named in a life insurance policy to receive the death benefit is called the _________.

a)

Policy holder

b)

Recipient

c)

Beneficiary

d)

Insurance Agent

38.

The following are the characteristics of bonds, EXCEPT

a)

A form of debt financing or raising money by borrowing from investors.

b)

Prices vary every day.

c)

Lower risk but lower yield.

d)

Guaranteed interest payments and a return of their money at the maturity date.

39.

A sequence of payments made at equal (fixed) intervals or periods of time

a)

Annuity

b)

Bond

c)

Stocks

d)

Income

40.

An annuity where the payment interval is the same as the interest period

a)

Simple Annuity

b)

General Annuity

c)

Ordinary Annuity

d)

Annuity Certain

41.

An annuity where the payment interval is NOT the same as the interest period

a)

Simple Annuity

b)

General Annuity

c)

Ordinary Annuity

d)

Annuity Certain

42.

A type of annuity in which the payments are made at the end of each payment interval.

a)

Simple Annuity

b)

General Annuity

c)

Ordinary Annuity

d)

Annuity Certain

43.

An annuity in which payments begin and end at definite times

a)

Simple Annuity

b)

Deferred Annuity

c)

Ordinary Annuity

d)

Annuity Certain

44.

The buyer of the house and lot pay P200,000 cash and P10,000 every month for 20 years. If money is 9% compounded monthly, how much is the cash value of the lot?

a)

1,311,449.54

b)

1,411,449.54

c)

1,511,449.54

d)

1,211,449.54

45.

A refrigerator is for sale at P17,999 in cash or on terms, P1,600 each month for the next 12 months. Money is 9% compounded monthly. Which is lower?

a)

Cash price

b)

The present value of the installment terms

46.

In a general annuity, variable 'j' stands for?

a)

The regular payment

b)

the equivalent interest rate per payment interval converted from the interest rate per period.

c)

the interest rate per period

d)

the number of conversion periods in the deferral.

47.

RCS Bank pays interest at the rate of 2% compounded quarterly. How much will Raphael have in the bank at the end of 5 years if he deposits P3,000 every month?

a)

P189,126.38

b)

P117,110.88

c)

P138,668.16

d)

P110,552.28

48.

Ms. Laarni is a beneficiary of a P1,000,000 insurance policy. Instead of taking the money as lump sum, she opted to receive a monthly stipend over a period of 10 years. If the insurance policy pays an interest of 5% compounded annually, what will be her monthly stipend?

a)

P100,000

b)

P10,552.28

c)

P50,000

d)

P17,552.28

49.

An annuity that does not begin until a given time interval has passed

a)

Simple Annuity

b)

Deferred Annuity

c)

Ordinary Annuity

d)

Annuity Certain

50.

A place where stocks can be bought or sold.

a)

Stock Market

b)

Philippine Stock Exchange

c)

Stocks

d)

Bonds

51.

Share in the company's profit

a)

Dividend

b)

Bonds

c)

Share

d)

Par Value

52.

Periodic interest payment that the bondholder receives during the time between purchase date and maturity date

a)

Coupon

b)

Share

c)

Bond

d)

Par Value

53.

A financial institution declared a dividend of P75,000.000 for its common stock. Suppose there are 900,000 shares of common stock, how much is the dividend per share?

a)

P100

b)

P83.33

c)

P94.25

d)

P57.58

54.

The process of loan repayment by installment payments is classified as _________.

a)

Amortizing a Loan

b)

Depreciation of Loan

c)

Appreciation of Loan

d)

Appreciation of Investment

55.

This is the formula used in annuity for the calculation of ________.

a)

Future Value of Annuity

b)

Present Value of Annuity

c)

Simple Interest

d)

Compound Interest

56.

An Ordinary Annuity assumes __________ of period payments while an Annuity Due Assumes ________ of period payments.

a)

Beginning, Later Date

b)

End, Beginning

c)

Beginning, End

d)

Later Date, End

57.

It is a series of equal payments at regular intervals.

a)

Interest

b)

Logic

c)

Annuity

d)

Proposition

58.

Ordinary annuity is paid or received at the _______ of the time periods.

a)

Beginning

b)

Middle

c)

End

d)

Annual

59.

Annuity Due is an annuity that is paid or received at the ____________ of the time period

a)

Beginning

b)

Middle

c)

End

d)

Annual

60.

The term used for an annuity in which the number of compounding periods per year coincides with the number of annuity payments per year.

a)

Simple

b)

General

c)

Compound

d)

Regular

61.

Determine the present value on July 7 of P6,800 paid at the end of each subsequent calendar quarter for 7 years if money is worth 6% compounded quarterly. What is the type of annuity in the given?

a)

Simple

b)

General

c)

Deferred

d)

Perpetuity

62.

Eli has decided to make semiannual payments P7,800 at the end of every 6 months for 8 years into an investment that he thinks will yield 7% compounded semiannually. What type of Annuity is applied?

a)

Simple

b)

General

c)

Deferred

d)

Perpetuity

63.

What type of annuity is described in the given?

If P2,000 is invested at the end of every year at 8% compounded semiannually, what will be the total value of the periodic investments after 20 years?

a)

Simple

b)

General

c)

Deferred

d)

Perpetuity

64.

What is the type of annuity in the given problem?

What is the future value of an annuity of P48,000 per annum, for 5 years, at 15% interest compounded monthly?

a)

Simple

b)

General

c)

Deferred

d)

Perpetuity

65.

Calculate the Periodic Interest Rate for a P10,000 loan compounded monthly at an annual rate of 15%

a)

0.125

b)

0.25

c)

0.0125

d)

0.15

66.

Sammy plans to have P350,000 in a retirement fund 30 years from now. What monthly ordinary annuity should he make if the investment he has selected earns 7.2% annual interest?

a)

P 3,129.09

b)

P 275.76

c)

P 871.29

d)

P 2,757.59

67.

Maria deposits P 100 every month for 6 years into an account that earns 5% compounded monthly. How much interest will her account have earned

a)

P 1,176.43

b)

P 2,235.56

c)

P 7,200.00

d)

P 8,376.43

68.

An investor has been making P 1,000 annual contributions to his account for five years. In this problem, should the future value be more than, less than, or equal to P 5,000?

a)

More than P 5,000

b)

Less than P 5,000

c)

Equal to P 5,000

d)

All of them

69.

You have received P 10,000 from an investment account in which you started investing five years ago. The initial investment will be _______.

a)

more than P 10,000

b)

equal to P 10,000

c)

less than P 10,000

d)

No option to choose.

70.

An ordinary annuity was purchased 5 years ago. The annuity pays 8% compounded quarterly. The quarterly payments have been P 500. What is the total value of the annuity to date?

a)

P 2,602.02

b)

P 2,933.30

c)

P 12,148.68

d)

P 22,880.98

71.

You plan to retire in 30 years and want to accumulate P 500,000 in your retirement account. How much must you invest each year to reach the goal. Assume end of the year investments and an earning rate of 12% ?

a)

P 2,072

b)

P 8,443

c)

P 14,896

d)

P 20,365

72.

Assuming a discount rate of 8%, P 3,000 received three years from now is worth __________ today.

a)

P 2,760

b)

P 2,283

c)

P 2,382

d)

P 2, 607

73.

Invested at 6%, P 10,000 today would be worth approximately P 20,000 in _________ years.

a)

12

b)

16

c)

22

d)

26

74.

Rich borrowed from a friend Php 25,000 at 10% simple interest rate. How much should she pay after 3 years? What is unknown in the aforementioned problem?

a)

Interest

b)

Time

c)

Future Value

d)

Principal

75.

Rich borrowed from a friend Php 25,000 at 10% simple interest rate. How much (in pesos) should she pay after 3 years?

a)

40 000

b)

32 500

c)

75 000

d)

7 500

76.

Supposed a lending firm offered 8% interest compounded quarterly with the same term for the amount to be borrowed , how much(in pesos) should be paid by Rich?

a)

31 706.045

b)

222 902.511

c)

62 954.253

d)

26 530.200

77.

Which is a better option for Kim for borrowing the money? Considering the same term for the amount to be borrowed offered by a lending firm with 8% interest compounded quarterly or the 10% annual interest rate offered by a friend? _____ because it yields to _____amount to be paid.

a)

8% interest compounded quarterly: greater

b)

10% annual simple interest rate : greater

c)

10% annual simple interest rate : lesser

d)

8% interest compounded quarterly: lesser

78.

Paying a debt at the end of every six months with an interest that is compounded monthly. Determine the type of annuity.

a)

Simple Annuity Due

b)

Simple Ordinary Annuity

c)

General Ordinary Annuity

d)

General Annuity Due

79.

Saving 10 000 Php at the beginning of each year in a fund that pays with an interest that is compounded annually. Determine the type of annuity.

a)

General Annuity Due

b)

Simple Ordinary Annuity

c)

Simple Annuity Due

d)

General Ordinary Annuity

80.

What is the present value (in Php) of Php2000 monthly payments for 3years with interest rate of 10% compounded quarterly?

a)

47 112.502

b)

20 515.529

c)

13 627. 384

d)

27 591.106

81.

What is the future value (in Php) of 5000 Php monthly payments for 2years with interest rate of 4% compounded annually?

a)

320 413.021

b)

10 200.000

c)

195 413.021

d)

75 129.027

82.

Teacher Kaye is saving 2000 Php every month by depositing it in a bank that gives an interest of 2% semi annually. How much(in Php) will she save in 5years?

a)

163 339.340

b)

228 103.079

c)

120 000.000

d)

10 202.005

83.

Find the present value(in Php) of a deferred annuity of P1 500.00 every 3 months for 8 years that is deferred 3 years if the money is worth 6% converted compounded quarterly.

a)

63 666.342

b)

41 491.026

c)

22 175.315

d)

105 157.368

84.

Rich converted her loan to light payments which gives her an option to pay 1 500 Php every month for 2years. The first payment is due three months from now. What is the period of deferral?

a)

2 months

b)

3 months

c)

21 months

d)

22 months

85.

Rich converted her loan to light payments which gives her an option to pay 1 500 Php every month for 2years. The first payment is due three months from now. How much (in Php)is the amount of the loan if the interest rate is 9% converted monthly?

a)

32 436.70

b)

39 240.00

c)

32 346.70

d)

3 240.00

Math Invest Week 13-14

Total questions: 85

Worksheet time: 5hrs 13mins

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