Question 1

Explain the concept of the present value of a single amount.

Accepted Answer

The present value of a single amount is ...

Question 2

Molly borrows money by promising to make a single payment of $100,000 at the end of 5 years. How much money is Molly able to borrow if the interest rate is 10%, compounded semiannually? (PV of $1, FV of $1, PVA of $1, and FVA of $1)  (Use appropriate factor(s)  from the tables provided.)

Accepted Answer

A)   $61,390
B)   $62,090
C)   $38,550
D)   $74,850
E)   $78,350F) A) and B)
G) A) and C)

Question 3

The interest rate is also called the ________ rate.

Accepted Answer

The answer of The interest rate is also called the...

Question 4

When you reach retirement age, you will have one fund of $100,000 from which you are going to make annual withdrawals of $14,702. The fund will earn 6% per year. For how many years will you be able to draw an even amount of $14,702?

Accepted Answer

The answer of When you reach retirement age, you will...

Question 5

Paul wants to invest a sum of money today that will accumulate to $50,000 at the end of 4 years. Assuming he can earn an interest rate of 8% compounded semiannually, how much must he invest today? (PV of $1, FV of $1, PVA of $1, and FVA of $1)  (Use appropriate factor(s)  from the tables provided.)

Accepted Answer

A)   $36,750
B)   $27,015
C)   $31,414
D)   $42,740
E)   $36,535F) D) and E)
G) B) and D)

Question 6

With deposits of $5,000 at the end of each year, you will have accumulated $38,578 at the end of the sixth year if the annual rate of interest is 10%. (PV of $1, FV of $1, PVA of $1, and FVA of $1) (Use appropriate factor(s) from the tables provided.)

Accepted Answer

A) True 
 B)False

Question 7

A company is creating a fund today by depositing $65,763. The fund will grow to $90,000 after 8 years. What annual interest rate is the company earning on the fund?

Accepted Answer

The answer of A company is creating a fund today...

Question 8

At an annual interest rate of 8% compounded annually, $5,300 will accumulate to a total of
$7,210.65 in 5 years. (PV of $1, FV of $1, PVA of $1, and FVA of $1) (Use appropriate factor(s) from the tables provided.)

Accepted Answer

A) True 
 B)False

Question 9

If we want to know the value of present-day assets at a future date, we can use:

Accepted Answer

A)   Annuity computations.
B)   Future value computations.
C)   Interest computations.
D)   Earnings computations.
E)   Present value computations.F) A) and D)
G) A) and C)

Question 10

The present value of $2,000 to be received nine years from today at 8% interest compounded annually is $1,000.40. (PV of $1, FV of $1, PVA of $1, and FVA of $1) (Use appropriate factor(s) from the tables provided.)

Accepted Answer

A) True 
 B)False

Question 11

The present value of an annuity table can be used to determine the value today of a series of payments to be received in the future.

Accepted Answer

A) True 
 B)False

Question 12

A company expects to invest $5,000 today at 12% annual interest and plans to receive $15,529 at the end of the investment period. How many years will elapse before the company accumulates the $15,529? (PV of $1, FV of $1, PVA of $1, and FVA of $1)  (Use appropriate factor(s)  from the tables provided.)

Accepted Answer

A)   8 years
B)   0.322 years
C)   10 years
D)   3.1058 years
E)   5 yearsF) A) and E)
G) B) and E)

Question 13

A series of equal payments made or received at the end of each period is an ordinary annuity.

Accepted Answer

A) True 
 B)False

Question 14

The present value of eight $5,000 semiannual payments invested for 4 years at 8% compounded semiannually is $33,663.50. (PV of $1, FV of $1, PVA of $1, and FVA of $1) (Use appropriate factor(s) from the tables provided.)

Accepted Answer

A) True 
 B)False

Question 15

Jason has a loan that requires a single payment of $4,000 at the end of 3 years. The loan's interest rate is 6%, compounded semiannually. How much did Jason borrow? (PV of $1, FV of $1, PVA of $1, and FVA of $1)  (Use appropriate factor(s)  from the tables provided.)

Accepted Answer

A)   $4,000.00
B)   $4,776.40
C)   $3,358.40
D)   $3,660.40
E)   $3,350.00F) A) and C)
G) C) and D)

Question 16

The Masterson family is setting up a vacation fund, and they plan on depositing $1,000 per quarter in an investment that will pay 12% annual interest. What amount will they have available for their vacation at the end of 2 years? (PV of $1, FV of $1, PVA of $1, and FVA of $1)  (Use appropriate factor(s)  from the tables provided.)

Accepted Answer

A)   $8,960.00
B)   $8,000.00
C)   $8,240.00
D)   $8,892.30
E)   $8,487.20F) A) and C)
G) A) and B)

Question 17

Mason Company has acquired a machine from a dealer that requires a payment of $45,000 at the end of five years. This transaction includes interest at 8%, compounded semiannually. What is the value of the machine today?

Accepted Answer

The answer of Mason Company has acquired a machine from...

Question 18

Explain the concept of the future value of an annuity.

Accepted Answer

The future value of an annuity...

Question 19

What amount can you borrow if you make six quarterly payments of $4,000 at a 12% annual rate of interest? (PV of $1, FV of $1, PVA of $1, and FVA of $1)  (Use appropriate factor(s)  from the tables provided.)

Accepted Answer

A)   $24,838.00
B)   $21,668.80
C)   $44,800.00
D)   $40,000.00
E)   $31,049.00F) A) and E)
G) All of the above

Question 20

Hao made a single investment which, after 5 years invested at 12% compounded semiannually, has accumulated to $214,900. How much did Hao invest initially? (PV of $1, FV of $1, PVA of $1, and FVA of $1)  (Use appropriate factor(s)  from the tables provided.)

Accepted Answer

A)   $ 21,486
B)   $214,896
C)   $120,000
D)   $160,584
E)   $211,476F) A) and B)
G) A) and E)

Exam 26: Present and Future Values in Accounting

Explain the concept of the present value of a single amount.

Correct Answer
verified
The present value of a single amount is ...
View Answer

A series of equal payments made or received at the end of each period is an ordinary annuity.

Correct Answer
verified

Hao made a single investment which, after 5 years invested at 12% compounded semiannually, has accumulated to $214,900. How much did Hao invest initially? (^PV^of^$1, ^FV^of^$1, ^PVA^of^$1, and ^FVA^of^$1) (Use appropriate factor(s) from the tables provided.)

Correct Answer
verified

With deposits of $5,000 at the end of each year, you will have accumulated $38,578 at the end of the sixth year if the annual rate of interest is 10%. (^PV^of^$1, ^FV^of^$1, ^PVA^of^$1, and ^FVA^of ^$1) (Use appropriate factor(s) from the tables provided.)

Correct Answer
verified

When you reach retirement age, you will have one fund of $100,000 from which you are going to make annual withdrawals of $14,702. The fund will earn 6% per year. For how many years will you be able to draw an even amount of $14,702?

Correct Answer
verified

Correct Answer
verified

The present value of eight $5,000 semiannual payments invested for 4 years at 8% compounded semiannually is $33,663.50. (^PV^of^$1, ^FV^of^$1, ^PVA^of^$1, and ^FVA^of^$1) (Use appropriate factor(s) from the tables provided.)

Correct Answer
verified

Molly borrows money by promising to make a single payment of $100,000 at the end of 5 years. How much money is Molly able to borrow if the interest rate is 10%, compounded semiannually? (^PV^of^$1, ^FV^of^$1, ^PVA^of^$1, and ^FVA^of^$1) (Use appropriate factor(s) from the tables provided.)

Correct Answer
verified

At an annual interest rate of 8% compounded annually, $5,300 will accumulate to a total of $7,210.65 in 5 years. (^PV^of^$1, ^FV^of^$1, ^PVA^of^$1, and ^FVA^of^$1) (Use appropriate factor(s) from the tables provided.)

Correct Answer
verified

Mason Company has acquired a machine from a dealer that requires a payment of $45,000 at the end of five years. This transaction includes interest at 8%, compounded semiannually. What is the value of the machine today?

Correct Answer
verified

Jason has a loan that requires a single payment of $4,000 at the end of 3 years. The loan's interest rate is 6%, compounded semiannually. How much did Jason borrow? (^PV^of^$1, ^FV^of^$1, ^PVA^of ^$1, and ^FVA^of^$1) (Use appropriate factor(s) from the tables provided.)

Correct Answer
verified

Explain the concept of the future value of an annuity.

Correct Answer
verified
The future value of an annuity...
View Answer

The present value of an annuity table can be used to determine the value today of a series of payments to be received in the future.

Correct Answer
verified

A company is creating a fund today by depositing $65,763. The fund will grow to $90,000 after 8 years. What annual interest rate is the company earning on the fund?

Correct Answer
verified

Correct Answer
verified

If we want to know the value of present-day assets at a future date, we can use:

Correct Answer
verified

Correct Answer
verified

What amount can you borrow if you make six quarterly payments of $4,000 at a 12% annual rate of interest? (^PV^of^$1, ^FV^of^$1, ^PVA^of^$1, and ^FVA^of^$1) (Use appropriate factor(s) from the tables provided.)

Correct Answer
verified

The present value of $2,000 to be received nine years from today at 8% interest compounded annually is $1,000.40. (^PV^of^$1, ^FV^of^$1, ^PVA^of^$1, and ^FVA^of^$1) (Use appropriate factor(s) from the tables provided.)

Correct Answer
verified

The interest rate is also called the ________ rate.

Correct Answer
verified

Exam 26: Present and Future Values in Accounting

Explain the concept of the present value of a single amount.

Correct AnswerverifiedThe present value of a single amount is ...View AnswerShow Answer

A series of equal payments made or received at the end of each period is an ordinary annuity.

Correct AnswerverifiedShow Answer

Hao made a single investment which, after 5 years invested at 12% compounded semiannually, has accumulated to $214,900. How much did Hao invest initially? (PV of $1, FV of $1, PVA of $1, and FVA of $1) (Use appropriate factor(s) from the tables provided.)

Correct AnswerverifiedShow Answer

With deposits of $5,000 at the end of each year, you will have accumulated $38,578 at the end of the sixth year if the annual rate of interest is 10%. (PV of $1, FV of $1, PVA of $1, and FVA of $1) (Use appropriate factor(s) from the tables provided.)

Correct AnswerverifiedShow Answer

When you reach retirement age, you will have one fund of $100,000 from which you are going to make annual withdrawals of $14,702. The fund will earn 6% per year. For how many years will you be able to draw an even amount of $14,702?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

The present value of eight $5,000 semiannual payments invested for 4 years at 8% compounded semiannually is $33,663.50. (PV of $1, FV of $1, PVA of $1, and FVA of $1) (Use appropriate factor(s) from the tables provided.)

Correct AnswerverifiedShow Answer

Molly borrows money by promising to make a single payment of $100,000 at the end of 5 years. How much money is Molly able to borrow if the interest rate is 10%, compounded semiannually? (PV of $1, FV of $1, PVA of $1, and FVA of $1) (Use appropriate factor(s) from the tables provided.)

Correct AnswerverifiedShow Answer

At an annual interest rate of 8% compounded annually, $5,300 will accumulate to a total of $7,210.65 in 5 years. (PV of $1, FV of $1, PVA of $1, and FVA of $1) (Use appropriate factor(s) from the tables provided.)

Correct AnswerverifiedShow Answer

Mason Company has acquired a machine from a dealer that requires a payment of $45,000 at the end of five years. This transaction includes interest at 8%, compounded semiannually. What is the value of the machine today?

Correct AnswerverifiedShow Answer

Jason has a loan that requires a single payment of $4,000 at the end of 3 years. The loan's interest rate is 6%, compounded semiannually. How much did Jason borrow? (PV of $1, FV of $1, PVA of $1, and FVA of $1) (Use appropriate factor(s) from the tables provided.)

Correct AnswerverifiedShow Answer

Explain the concept of the future value of an annuity.

Correct AnswerverifiedThe future value of an annuity...View AnswerShow Answer

The present value of an annuity table can be used to determine the value today of a series of payments to be received in the future.

Correct AnswerverifiedShow Answer

A company is creating a fund today by depositing $65,763. The fund will grow to $90,000 after 8 years. What annual interest rate is the company earning on the fund?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

If we want to know the value of present-day assets at a future date, we can use:

Correct AnswerverifiedShow Answer

Paul wants to invest a sum of money today that will accumulate to $50,000 at the end of 4 years. Assuming he can earn an interest rate of 8% compounded semiannually, how much must he invest today? (PV of $1, FV of $1, PVA of $1, and FVA of $1) (Use appropriate factor(s) from the tables provided.)

Correct AnswerverifiedShow Answer

What amount can you borrow if you make six quarterly payments of $4,000 at a 12% annual rate of interest? (PV of $1, FV of $1, PVA of $1, and FVA of $1) (Use appropriate factor(s) from the tables provided.)

Correct AnswerverifiedShow Answer

The present value of $2,000 to be received nine years from today at 8% interest compounded annually is $1,000.40. (PV of $1, FV of $1, PVA of $1, and FVA of $1) (Use appropriate factor(s) from the tables provided.)

Correct AnswerverifiedShow Answer

The interest rate is also called the ________ rate.

Correct AnswerverifiedShow Answer

Correct Answer
verified
The present value of a single amount is ...
View Answer

Correct Answer
verified

Hao made a single investment which, after 5 years invested at 12% compounded semiannually, has accumulated to $214,900. How much did Hao invest initially? (^PV^of^$1, ^FV^of^$1, ^PVA^of^$1, and ^FVA^of^$1) (Use appropriate factor(s) from the tables provided.)

Correct Answer
verified

With deposits of $5,000 at the end of each year, you will have accumulated $38,578 at the end of the sixth year if the annual rate of interest is 10%. (^PV^of^$1, ^FV^of^$1, ^PVA^of^$1, and ^FVA^of ^$1) (Use appropriate factor(s) from the tables provided.)

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

The present value of eight $5,000 semiannual payments invested for 4 years at 8% compounded semiannually is $33,663.50. (^PV^of^$1, ^FV^of^$1, ^PVA^of^$1, and ^FVA^of^$1) (Use appropriate factor(s) from the tables provided.)

Correct Answer
verified

Molly borrows money by promising to make a single payment of $100,000 at the end of 5 years. How much money is Molly able to borrow if the interest rate is 10%, compounded semiannually? (^PV^of^$1, ^FV^of^$1, ^PVA^of^$1, and ^FVA^of^$1) (Use appropriate factor(s) from the tables provided.)

Correct Answer
verified

At an annual interest rate of 8% compounded annually, $5,300 will accumulate to a total of $7,210.65 in 5 years. (^PV^of^$1, ^FV^of^$1, ^PVA^of^$1, and ^FVA^of^$1) (Use appropriate factor(s) from the tables provided.)

Correct Answer
verified

Correct Answer
verified

Jason has a loan that requires a single payment of $4,000 at the end of 3 years. The loan's interest rate is 6%, compounded semiannually. How much did Jason borrow? (^PV^of^$1, ^FV^of^$1, ^PVA^of ^$1, and ^FVA^of^$1) (Use appropriate factor(s) from the tables provided.)

Correct Answer
verified

Correct Answer
verified
The future value of an annuity...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

What amount can you borrow if you make six quarterly payments of $4,000 at a 12% annual rate of interest? (^PV^of^$1, ^FV^of^$1, ^PVA^of^$1, and ^FVA^of^$1) (Use appropriate factor(s) from the tables provided.)

Correct Answer
verified

The present value of $2,000 to be received nine years from today at 8% interest compounded annually is $1,000.40. (^PV^of^$1, ^FV^of^$1, ^PVA^of^$1, and ^FVA^of^$1) (Use appropriate factor(s) from the tables provided.)

Correct Answer
verified

Correct Answer
verified