Reference no: EM132498965
Question 1: An annuity in which the cash flows occur at the end of each period is known as an __________ ________________.
Question 2: An annuity in which the cash flows occur at the beginning of each period is known as an ____________.
Question 3: A special type of annuity in which a stream of level cash flows that are paid forever is known as _____________.
Question 4: ______ _______interest is interest that is only earned on the original deposit.
Short Answer
Question 5: Why is it important for business managers to be familiar with the time value of money concepts?
Question 6: Why do we say money has time value?
Question 7: What is an amortization schedule?
Calculations
Question 8: What is the present value of $10,000 to be received in 8 years? Your required rate of return is 6% per year.
Question 9: If you invest $1,000 a year for 15 years at 6% annual interest, how much will you have at the end of the 15th year?
Question 10: If you buy a 10 year, 2% CD for $12,000. How much is it worth at maturity?
Question 11: How much would you be willing to pay today for an investment that pays $1,300 per year at the end of the next 10 years? Your required rate of return is 7% per year.
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