10. Time Value of Money

Which of the following equations correctly computes the present value (PV) of a single future cash flow (FV) to be received in $n$ periods, discounted at an annual interest rate $r$?

What is the formula to calculate the compound interest earned on a principal amount $P$ invested for 3 years at an annual interest rate $r$, compounded once per year?

What is the future value of $11 invested for 3 years at an annual interest rate of 5\% compounded annually?

If Bruce waits for five years to begin paying back his loan, which time value of money concept is most relevant for calculating the present value of his future payments?

Which of the following are common methods for calculating the time value of money?

Why is compound interest generally more advantageous than simple interest when investing money over time?

Which of the following is a method commonly used to compute the time value of money?

Which of the following tax planning strategies is based on the present value of money?

What is the formula to calculate the monthly payment (PMT) on a 36-month loan with principal $P$, annual interest rate $r$ (compounded monthly), and 36 equal payments?

Which of the following best describes an amount paid for the use of money for a period of time?

What is the future value of an ordinary annuity where $400 is invested at the end of each year for 15 years at an annual interest rate of 6%?

If you want to have \$1,000,000 saved at retirement in 30 years and you can earn an annual interest rate of 6\% compounded monthly, how much must you deposit at the end of each month? (Assume payments are made at the end of each period.)

In a standard loan amortization schedule, what happens to the amount of principal paid with each successive payment over time?

Which one of the following best describes an ordinary annuity?

Jorge takes out a loan of $10,000 at an annual interest rate of 6%, compounded annually. If he makes equal annual payments of $2,000 at the end of each year, approximately how many years will it take Jorge to pay off the loan?