Reading 5- LOS D (Part 2) ～ Q1－8 present, single, money, future, interpret

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LOS d, (Part 1): Calculate and interpret the future value (FV) and present value (PV) of a single sum of money.

1、What will $10,000 become in 5 years if the annual interest rate is 8 percent, compounded monthly?

A)   $14,693.28.

B)   $14,898.46.

C)   $14,000.00.

D)   $14,802.44.

2、If a person needs $20,000 in 5 years from now and interest rates are currently 6 percent how much do they need to invest today if interest is compounded annually?

A)   $14,945.

B)   $14,683.

C)   $14,284.

D)   $15,301.

3、An investor deposits $10,000 in a bank account paying 5 percent interest compounded annually. Rounded to the nearest dollar, in 5 years the investor will have:

A)   $10,210.

B)   $12,763.

C)   $12,500.

D)   $14,768.

4、A local bank offers a certificate of deposit (CD) that earns 5.0 percent compounded quarterly for three and one half years. If a depositor places $5,000 on deposit, what will be the value of the account at maturity?

A)   $5,931.06.

B)   $5,875.00.

C)   $5,949.77.

D)   $5,993.16.

5、Given a 5 percent discount rate, the present value of $500 to be received three years from today is:

A)   $432.

B)   $400.

C)   $452.

D)   $578.

6、A certain investment product promises to pay $25,458 at the end of 9 years. If an investor feels this investment should produce a rate of return of 14 percent, compounded annually, what’s the most he should be willing to pay for it?

A)   $7,618.

B)   $7,829.

C)   $8,342.

D)   $9,426.

7、A $500 investment offers a 7.5 percent annual rate of return. How much will it be worth in four years?

A)   $650.

B)   $668.

C)   $753.

D)   $892.

8、If $10,000 is invested in a mutual fund that returns 12 percent per year, after 30 years the investment will be worth:

A)   $10,120.

B)   $299,599.

C)   $11,200.

D)   $300,000.