10. Time Value of Money

If you purchase a $100 Series EE savings bond and hold it for 30 years at a fixed annual interest rate of 3%, compounded semiannually, how much will the bond be worth at maturity? (Assume no early redemption and no tax considerations.)

Which of the following should be valued using a perpetuity formula?

Which of the following equations correctly represents the future value (FV) of a single sum invested today for $n$ years at an annual interest rate $r$, compounded once per year?

Which of the following factors affects the present value of an investment?

Which of the following formulas would most likely represent the present value of an ordinary annuity factor, where $r$ is the interest rate per period and $n$ is the number of periods?

Which of the following best describes the formula \( EAR = (1 + \frac{rate}{m})^m - 1 \)?

Which rate is used to discount future cash flows to their present value when valuing Treasury Inflation-Protected Securities (TIPS)?

Which capital budgeting method takes into consideration the time value of money?

What is the name for an infinite stream of constant payments occurring at regular time intervals?

What is the formula to calculate the monthly payment (PMT) on a 20-year loan with principal amount $P$, annual interest rate $r$ (compounded monthly), and total number of monthly payments $n$?

Which of the following will increase the future value of an annuity, assuming all other factors remain constant?

A 1-year loan with a 5\% APR will have the most interest charged with which type of compounding?

Which financial function calculates the total amount of interest paid over a specific number of payments?

Understanding that money grows over time explains why you need to:

Approximately what annual interest rate, compounded annually, is needed to double an investment in 4 years?