Which of the following has an impact on the dollar amount of the interest related to any financing transaction?
-Time
-Interest rate.
-All of these answer choices are correct.
-Principal.
All of these answer choices are correct.
The table that would show the smallest value for 7 periods at 5% is the:
-present value of an annuity due table.
-future value of 1 table.
-present value of an ordinary annuity table.
-present value of 1 table.
present value of 1 table
The amounts that must be deposited now at 6% interest to permit withdrawals of $10,000 at the end of each period for a specified number of periods are contained in the:
-present value of an annuity due of 1 table.
-present value of 1 table.
-future value
present value of an ordinary annuity of 1 table.
For an investment that earns 1% compounded monthly for two years, how many compounding periods are there?
-2
-24
-12
-8
24
Future value is
-all of these answer choices are correct.
-the value now of a future amount.
-the amount that must be invested now to produce a known future value.
-always greater than the present value
always greater than the present value
Which of the following is a primary characteristic of an annuity?
-The periodic rents are always equal.
-All of these answer choices are correct.
-The periodic rent is always paid at the beginning of each time period.
-Interest is compounded once each yea
The periodic rents are always equal.
When an annuity is received at the end of each period, it is called a (n):
-annuity due.
-deferred annuity.
-ordinary annuity.
-annual annuity.
ordinary annuity
Avery Tag makes an investment today (January 1, 2014). Avery will receive $40,000 every December 31st for the next six years (2014 - 2019). If Avery wants to earn 12% on her investment, what is the most she should invest on January 1, 2014?
Time periods F
$164,456
On January 1, 2014, Simmons Company sold to Flay Corporation $400,000 of its 10% bonds for $354,118 to yield 12%. Interest is payable semiannually on January 1 and July 1. What amount should Simmons report as interest expense for the six months ended June
$21,247
Wendy Brown invests $50,000 at 10% annual interest. How much money has accumulated after five years, assuming simple interest?
-$75,000.
-$80,526.
-$25,000.
-$55,000.
$75,000
Which table would you use to determine how much you will have five years from now if you deposit $10,000 today at 8% compounded annually?
-Present value of an ordinary annuity of 1
-Future value of 1 or present value of 1
-Future value of an annuity due o
Future value of 1 or present value of 1
Joan's uncle has promised her $20,000 when she graduates college 4 years from now. What is the equivalent amount stated in today's dollars? Given below are the present value factors for 1 at 8% for one to three periods with interest compounded annually.
P
$20,000 � .92593 � .79383
Which of the following is true?
-Rents occur at the end of each period in an annuity due.
-Rents occur at the beginning of each period in an annuity due.
-Rents occur in the middle of each period in an ordinary -annuity.
-Rents occur at the beginning of e
Rents occur at the beginning of each period in an annuity due.
Sally Tucker wants to invest a certain sum of money at the end of each year for six years. The investment will earn 6% compounded annually. At the end of six years, she will need a total of $500,000 accumulated. How should she compute her required annual
$500,000 divided by the future value of a 6-year, 6% ordinary annuity of 1 factor.
The future value of an ordinary annuity will always be:
-greater than or equal to the future value of an annuity due.
-less than the future value of an annuity due.
-equal to the future value of an annuity due.
-greater than the future value of an annuity
less than the future value of an annuity due.
Alexa Smith has saved $250,000 for her retirement. It is invested in an annuity that pays 12%. Alexa wishes to make equal semi-annual withdrawals over the next 10 years, beginning 6 months from now. How much can she withdraw each period without exhausting
$21,796.
Which of the following investments will result in the smallest future amount?
-One that offers quarterly compounding.
-One that offers annual compounding.
-One that offers monthly compounding.
-One that offers semi-annual compounding.
One that offers annual compounding.
Which of the following is a correct definition for one of the variables fundamental to all compound interest problems?
-The number of time periods is the number of compounding periods where each period may be equal to or greater than a year.
-The future v
The present value is the value today for a future sum or sums discounted assuming compound interest.
On December 1, 2014, Doreen Company sold land to McKnight Company. The two companies entered into an installment sales contract at a predetermined interest rate. The contract required five equal annual payments with the first payment due on December 1, 20
Present value of an annuity due of 1 for five periods