BUSI 320 Learnsmart Assignment Chapter 9 Liberty University Complete Answer
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For which of the following would time value of money be a factor when considering an investment in or sale of an asset?
Expressing graphical form, the line showing the future value will ________ if the number of periods increase.
The present value of an annuity is the sum of the discounted values of a series of payments to be received in the future.
In order to present time value relationships in graphical form one must know ________.
$1,000 is invested for two years at 5% interest per annum. How much will your investment be worth after 2 years if compounded annually?
Which of the following are correct approaches for calculating the future value of a lump sum of $1,000 at 8% over three years.
If an investment of $2,000 pays 10% interest, how many periods will it take for the investment to have a value of $2,662?
A decrease in the discount rate would the present value of an annuity.
$1,000 invested today will be worth $1,330.03 years from today. What is the interest rate? Round to the nearest whole percentage.
Which of the following are common methods for calculating the time value of money?
Match the situation on the left with appropriate time value of money calculation on the right.
Which of the following factors affect the calculation of present value?
As a rule, the future value of a single some it will be ________ its present value.
You have won a small lottery of $1,000,000. However, instead of a lump sum amount, the lottery will pay you $50,000 per year for 20 years (total of $1,000,000). If interest is 4%, what is the present value of your winnings, assuming payments are received at the end of each year? (Note: Ignore inflation and taxes)
Calculate the present value of the following based on a discount rate of 5%. The answers may vary slightly due to rounding.
The future value of an annuity of $1,000 will be ________ the future value of a single sum of $1,000.
What factors must be known in order to calculate the current value of an annuity?
The financial calculator does not require us to use the function.
Calculate and align the future values for the following lump sum investments:
You plan to invest $3,500 per year for 39 years into an investment plan. What will the value of the investment be after 39 years if the interest rate is 9% per year?
The factors needed to compute the interest rate using Excel functions are:
An increase in the number of periods will _____ the present value of a single sum.
An increase in the number of periods will _____ the present value of a single sum to be received in the future.
For an annuity, an increase in the number of periods will the present value
In time value of money problems, a period could be
To find the present value of a single sum, what table or procedure would you use?
The present value of an annuity is the value today of a series of equal payments to be received in the future
The discount rate is the interest rate used to calculate the time value of money
A cash flow that provides only on payment could be considered an annuity
The future value of $1000 received today will be lower if the interest rate is lower
The assumption for time value of money calculation is that Compound interest is used unless stated otherwise
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