10. Time Value of Money

Which term refers to the earning potential of money over time?

At an annual interest rate of 12.5\%, how many years will it take for an investment to triple in value if interest is compounded annually?

All else constant, which one of the following will result in the lowest present value of a lump sum?

Which term refers to the payment made for the use of borrowed money?

The variables in a present value of an annuity problem include all of the following, except:

In the Excel PMT function, which argument corresponds to the interest rate per period?

Which one of the following will decrease the present value of an annuity?

2. Why does the amount of interest you pay on a loan typically decrease every month when making regular payments?

What is the present value of \$6,811 to be received in one year if the discount rate is 6.5\%? (Round your answer to the nearest dollar.)

If you invest \$5,000 today at an annual interest rate of 6\% compounded annually, how many years will it take for your investment to grow to \$10,000? (Round your answer to the nearest whole year.)

What is the present value of receiving $500 at the end of each year for 10 years, assuming a discount rate of 5% per year?

To what amount will $P invested for n years at an annual interest rate of r percent, compounded annually, accumulate?

Which of the following equations correctly calculates the future value (FV) of $1,000 invested today for 5 years at an annual interest rate of 4.3% compounded annually?

Which formula is used to calculate the present value (PV) of a perpetuity given a constant perpetual cash flow (C) and a discount rate (r)?

If $1,000$ is invested at an annual interest rate of $5\%$ compounded annually, what will be the value of the investment after $3$ years?