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Discounted Cash Flow Valuation Chapter Exam

Exam Instructions:

Choose your answers to the questions and click 'Next' to see the next set of questions. You can skip questions if you would like and come back to them later with the yellow "Go To First Skipped Question" button. When you have completed the practice exam, a green submit button will appear. Click it to see your results. Good luck!

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Question 1 1. Which of the following statements is true regarding annuities?

Question 2 2. Which of the following statements regarding inflation are true?

Question 3 3. What is the definition of an annuity?

Question 4 4.

Bob goes to the bank to ask about an annuity. Bob tells the banker that he can put $300 into an annuity every month. The banker tells him he can make monthly interest payments with an annual interest rate of 4%. Bob wants to know the value of his annuity after 20 years, to the nearest dollar.

What is the future value after 20 years?

Question 5 5. Tom deposits $2,000 into an account with an interest rate of 2.5% that is compounded quarterly. Rounding to the nearest dollar, what is the balance in Tom's account after 5 years?

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Question 6 6.

Bob goes to the bank to ask about an annuity. Bob tells the banker that he can put $300 into an annuity every month. The banker tells him he can make monthly interest payments with an annual interest rate of 4%. Bob wants to know the value of his annuity after 20 years.

What is n equal to in this problem?

Question 7 7. Sam deposits $5,000 into an account with an interest rate of 3% that is compounded monthly. Rounding to the nearest dollar, what is the balance after 10 years?

Question 8 8. Becky deposits $12,000 into an account with an interest rate of 7% that is compounded monthly. Rounding to the nearest dollar, what is the balance after 7 years?

Question 9 9. What is the present value of an annuity if the interest rate is 5% per year for 5 years, and the annual payments are $25,000?

Question 10 10.

Sarah is willing to pay $500 per month for an annuity with an annual interest rate of 6% where the bank pays the interest on a monthly basis. Sarah wants to know how much her annuity will be worth in 5 years.

What is the future value of this annuity after 5 years, to the nearest dollar?

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Question 11 11. In the compound interest formula, what does the n stand for?

Question 12 12.

Bob goes to the bank to ask about an annuity. Bob tells the banker that he can put $300 into an annuity every month. The banker tells him he can make monthly interest payments with an annual interest rate of 4%. Bob wants to know the value of his annuity after 20 years.

What is i equal to in this problem?

Question 13 13. Which of the following examples is an annuity?

Question 14 14.

Sarah is willing to pay $500 per month for an annuity with an annual interest rate of 6% where the bank pays the interest on a monthly basis. Sarah wants to know how much her annuity will be worth in 5 years.

What is i equal to in this problem?

Question 15 15. Which of the following is the correct formula for compound interest?

Discounted Cash Flow Valuation Chapter Exam Instructions

Choose your answers to the questions and click 'Next' to see the next set of questions. You can skip questions if you would like and come back to them later with the yellow "Go To First Skipped Question" button. When you have completed the practice exam, a green submit button will appear. Click it to see your results. Good luck!

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