A good example of an annuity is making a $1,000 annual contribution to a savings account for 10 years at 5% interest.Select one:True

False Question 2CorrectMark 1.00 out of 1.00Flag questionQuestion textA credit card balance of $4,000 left unpaid with a 15% interest rate over a year will result in a balance of $4600. After 5 years the balance will increase to more than double the initial balance.Select one:

True FalseQuestion 3CorrectMark 1.00 out of 1.00Flag questionQuestion textYou’ve been very diligent since your early 20s and have saved a nice amount so that you retire and travel the world in style and

support your lifestyle and that of your family. Suppose at age 65 you wish to begin making annual withdrawals from your retirement account. You have 2.5 million dollars and your account is set up to earn 8% interest annually. What is the amount of the equal annual withdrawal that you can make until you are 85 years old? Choose the best answer.Select one:a. $80,000b. $140,000

c. $250,000 d. $500,000e. $650,000Question 4CorrectMark 1.00 out of 1.00Flag questionQuestion textTo determine the Future Value of a single dollar amount, you must know:Select one:a. The present value of your depositb. The interest rate to be earned on the depositc. The number of years the deposit will be invested

d. All of the above e. None of the aboveQuestion 5CorrectMark 1.00 out of 1.00Flag questionQuestion textCompounding occurs when your initial investment earns interest and in the next time period becomes part of the principal on which you earn even more interest in the coming time period.Select one:

True FalseQuestion 6CorrectMark 1.00 out of 1.00Flag questionQuestion textFVIF, FVIFA, PVIF, and PVIFA can be calculated usingSelect one:a. future/present value tablesb. a financial calculatorc. using simple mathematics

d. all of the above e. none of the aboveQuestion 7IncorrectMark 0.00 out of 1.00Flag questionQuestion textPVIFA stands forSelect one:a. Present Value Interest Factor of an Annuityb. Present Value Interest Factor of an Amountc. Percentage Value Interest Factor of an Annuity

d. Percentage Value Investment Factor of an AmountQuestion 8CorrectMark 1.00 out of 1.00Flag questionQuestion textUsing the future value calculations to estimate the funds needed to meet a goal takes compounding into account.Select one:

True FalseQuestion 9CorrectMark 1.00 out of 1.00Flag questionQuestion textAn annuity is a series of equal payments that occur at evenly spaced intervals, usually annually.Select one:

True FalseQuestion 10CorrectMark 1.00 out of 1.00Flag questionQuestion textMichael and Sandy purchased a home for $100,000 five years ago. If it appreciated 6% annually, what is it worth today?Select one:a. $100,000b. $106,000c. $130,000

d. $133,823 e. $135,603Question 11CorrectMark 1.00 out of 1.00Flag questionQuestion textMegan invested $5,000 in an account she expects will earn 7% annually. Approximately how many years will it take for the account to double in value?Select one:a. 8b. 9

c. 10 d. 11e. 12Question 12CorrectMark 1.00 out of 1.00Flag questionQuestion textUsing the calculation for the Future Value of a Single dollar amount, an initial investment of $1000 over 10 years at 10% will

more than doubleSelect one:

True FalseQuestion 13CorrectMark 1.00 out of 1.00Flag questionQuestion textThe following statements are true about discounting:Select one:a. It is the opposite of compoundingb. It is the process of working backwards from the desired future value to determine the present value you must invest based on a specific interest rate and time period.c. It is a term that is associated with determining Present Valued. A&B only

e. All of the above Question 14CorrectMark 1.00 out of 1.00Flag questionQuestion text

Which of the below are true concerning the Time Value of Money?Select one:a. The value of your money is influenced by the time it is receivedb. The value of a given amount of money is greater the earlier it is receivedc. The earlier you start saving/investing, the more quickly your money can earn interest and growd. It can be applied to a single sum or an annuity

e. All of the above Question 15CorrectMark 1.00 out of 1.00Flag questionQuestion textPresent Value is the amount that would have to be invested today at a given interest rate over a specified time period to accumulate a future amount. Select one:

True

FalseQuestion 16CorrectMark 1.00 out of 1.00Flag questionQuestion textPresent Value calculations take discounting into account.Select one:

True FalseQuestion 17CorrectMark 1.00 out of 1.00Flag questionQuestion textIn regards to the Future Value of a single dollar amount, FVIF increases when:Select one:a. the interest rate increasesb. the time period increasesc. the interest rate decreases

d. A&B only e. All of the above

Question 18CorrectMark 1.00 out of 1.00Flag questionQuestion textYou are 20 years old and sadly, you grandmother has passed away. One of the things she wanted for you was to own a home someday. She left you an inheritance of $10,000. Although this amount is not enough today to make a down payment on a home, you invest the lump sum now for the next 20 years so that when you turn 40 you can make a down payment on the house of your dreams. Bank A offers you an interest rate of 6% and Bank B offers you 7%. How much of a difference will a single percentage point make on the value of your investment over 20 years? Choose the best answer.Select one:a. $600b. $700c. $1,200

d. $6,600 e. $7,700Question 19CorrectMark 1.00 out of 1.00Flag questionQuestion textYou just won $500,000 in the lottery. You are 25 years old and want to retire by the time you are 50 years old with $2,000,000 in your account. What percentage of your winnings should you invest now at 7% to meet your goal?

Select one:a. 50%

b. 74% c. 100%d. you do not have enough to invest at 7% interest for 25 years to meet your goalQuestion 20IncorrectMark 0.00 out of 1.00Flag questionQuestion textIf you made an annual contribution of $10,000 to a savings account for 30 years at 7%, about what amount would you have at the end? Choose the best answerSelect one:a. $75,000b. $325,000

c. $600,000 d. $950,000e. $1.2 millionQuestion 21CorrectMark 1.00 out of 1.00

Flag questionQuestion textCompound interest can work in our favor when we are saving money but can also work against us in that it can expand our debt substantially.Select one:

True FalseQuestion 22CorrectMark 1.00 out of 1.00Flag questionQuestion textUsing time value of money is not important when planning for short-term goals.Select one:True

False Question 23CorrectMark 1.00 out of 1.00Flag questionQuestion text

FVIF stands forSelect one:a. Future Variable Investment Factor

b. Future Value Interest Factor c. Fluidity Value Investment Factord. Future Value Investment FactorQuestion 24CorrectMark 1.00 out of 1.00Flag questionQuestion textUsing time value of money is important when planning for long-term goals.Select one:

True FalseQuestion 25CorrectMark 1.00 out of 1.00Flag questionQuestion textFuture Value is the value to which an amount today will grow if it earns a specific rate of interest over a given period of time.

Select one:

True False