10. Time Value of Money

Which of the following is true for calculating the future value of multiple cash flows?

How many years will it take for $20 to grow to $100 if the simple interest rate is 4\% per year?

Which one of the following methods of analysis ignores the time value of money?

If you desire your savings to double in 6 years, which annual interest rate, compounded annually, is closest to what you need?

Inga took out a $10,000 loan at an annual interest rate of 6%, to be repaid in equal annual installments of $1,500. After making payments for 4 years, how many more years will it take Inga to fully pay off the loan?

A project has the following cash flows:\[\begin{align*}\text{Year 0:} & \ -\$10,000 \\\text{Year 1:} & \ +\$4,000 \\\text{Year 2:} & \ +\$4,000 \\\text{Year 3:} & \ +\$4,000 \end{align*}\]What is the internal rate of return (IRR) for this project (rounded to the nearest whole percent)?

A certificate of deposit pays a higher interest rate than a savings account because the money is:

What is the present value of \$100 to be received in 8 years if the annual interest rate is 5\% compounded annually?

Ava charges $1,200 to her credit card, which has an annual interest rate of 18% compounded monthly. If she pays off the entire balance in 11 months, how much total interest will she pay?

If you borrowed \$4,500 at an annual interest rate of 9.5\% for 1 year with a single payment due at the end of the year, what is the total amount you must repay at the end of the year?

If $1 is invested today at an annual interest rate of 3.5\% compounded annually, how much will it be worth after 75 years?

Which of the following is an example of an annuity?

What is the future value of \$100 compounded annually for 50 years at an annual interest rate of 10\%? (Use the formula: \( FV = PV \times (1 + r)^n \))

The taxable portion of each annuity payment is calculated using which method?

Which of the following time value of money equations is most appropriate for a manager to use when forecasting future operating income based on current income and a constant growth rate?