Objective questions on present and future value


Question1: Calculate the interest rate implied (approx.), where PV=1000, n=5, FV=1436.

[A] 7.5%

[B] 9.2%

[C] 5.6%

[D] 6.2%

Question2:  Calculate the interest rate implied (approx.), where PV=1000, n=11, FV=1750.

[A] 7.5%

[B] 9.2%

[C] 5.2%

[D] 3.7%

Question3: How long (approx.) will it take for $500 to grow to $1,000 at 8 percent per year?

[A] 6 

[B] 7

[C] 8

[D] 9

Question4. How long (approx.) will it take for $500 to grow to $700 at 5 percent per year?

[A] 6.9 

[B] 10.9

[C] 11.7

[D] 13.2

Question5: A famous quarterback just signed a 10 million dollar contract providing 1 million dollar a year for ten years. The first payment is after one year. The interest rate is 10 percent. The quarterback's contract present value is approximately?

[A] 5.2 million

[B] 6.1

[C] 6.8

[D] 8.9

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Finance Basics: Objective questions on present and future value
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