Exam 3

Question 1

Which of the following is not one of the three components of interest?

Answer 1

Risk-free rate of interest

Question 2

Which of the following is the formula for determining the bond interest paid?

Answer 2

Face amount X stated interest rate

Question 3

What is the minimum number of periods That must pass before a deferred annuity can begin to produce rents?

Answer 3

2

Question 4

If an annuity due and an ordinary annuity have the same number of equal payments and the same interest rates then the…?

Answer 4

Present value of the annuity due is greater than the present value of the ordinary annuity

Question 5

And annuity is a series of

Answer 5

Withdrawals or payments

Question 6

Kaylan deposit $1000 in a 12% savings account today in three years the amount in that account will be found by what table?

Answer 6

Future value of 1

Question 7

Why is the future value always more than the present value

Answer 7

Due to earned accumulated interest

Question 8

What does the process of accumulation involve

Answer 8

Determining future value

Question 9

T/F:

Present value will be larger the closer the present date is to the future value date

Answer 9

True

Question 10

Which of the following would be incorrectly identified as a fundamental variable in a compound interest problem?

Answer 10

Past value

Question 11

The — shows the largest value for an interest rate of 10% for eight periods

Answer 11

Future value of an ordinary annuity of 1 table

Question 12

Simple interest is the growth of which of the following for one time period?

Answer 12

Principal

Question 13

Which of the following would be incorrectly identified as a present value-based accounting measurement?

Answer 13

Accounts receivable