Question 22 What's the future value of $4.400 after 5 years if the appropriate interest rate...

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Answer 1

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ANSWER 1:

OPTION C- $5913.23

FUTURE VALUE=PRESENT VALUE*(1+ ANNUAL INTEREST RATE/NO. OF PERIODS BASED ON FREQUENCY)NO. OF PERIODS BASED ON FREQUENCY*NUMBER OF YEARS

FV=4400*(1+.06/2)5*2

FV=5913.23

ANSWER 2:OPTION A 1753.51

FUTURE VALUE=PRESENT VALUE*(1+ ANNUAL INTEREST RATE/NO. OF PERIODS BASED ON FREQUENCY)NO. OF PERIODS BASED ON FREQUENCY*NUMBER OF YEARS

FV=1300*(1+0.06/12)12*5

FV=1753.51

ANSWER 3: FALSE

CASH FLOW AND ANNUITY AMOUNTS CAN BE IN FORM OF UNEVEN AMOUNTS.

ANSWER 4: FALSE

IF A BANK COMPOUNDS SAVING ACCOUNTS QUARTERLY THE EFFECTIVE ANNUAL RATE WILL NOT EXCEED THE NOMINAL PRICE.

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Answer 2

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