10. Time Value of Money

The future value of an ordinary annuity table is used when calculating:

In order to discount multiple cash flows to the present, one would use:

Future value is the ______ value of an investment at some time in the future.

What is the future value (FV) of an ordinary annuity where $500 is invested at the end of each year for 20 years at an annual interest rate of 10%? (Use the formula: $FV = PMT \times \frac{(1 + r)^n - 1}{r}$, where $PMT = 500$, $r = 0.10$, $n = 20$.)

If John takes out a 30-year mortgage of \$200,000 at an annual interest rate of 5\% compounded monthly, how much total interest will he pay over the life of the mortgage?

Which equation best represents the calculation of future value (\(FV\)) using simple interest?

The interest rate on a savings account determines:

How long (in years and months) will it take for an investment to double at an annual interest rate of 6\% compounded monthly?

What is the present value of a \$500 payment to be received in one year if the discount rate is 5\% per annum?

In the context of time value of money equations, 'nper' is the acronym for which financial function term?

How does an increase in the interest rate affect the present value of a future cash flow?

The interest rate on a savings account determines which of the following?

Why is a dollar received today worth more than a dollar received in the future?

At what discount rate would you be indifferent between accepting a project and rejecting it?

Which of the following formulas represents the present value (PV) of a single future sum (FV) discounted at an interest rate $r$ for $n$ periods?