Question

9. Using you can calculate Future Value if Present Value is known. a. discounting b. discrete models c. compounding d. continuous Models 10. Manhattan Island was sold for $24 in 1626. At 6% compounded annually, what was it worth in 2009? a. $118,129,302,081 b. $218,129,302,081 C. $129,302,081 d. $318,129,302,081 11. You estimate that the maintenance cost of a package boiler is $500 for the first year but it will increase by $50 more each year than the previous year after the first year of service. Which type of series is this? a. Irregular b. Uniform C. Single d. Gradient 12. can be said is the interest rate required for any project to be accepted. a. IRR b. MARR CPI I C. d. EUAC 13. Cash Flow at ABC Oil Company is continuously reinvested. An investment in a new data logging system is expected to return a nominal interest of 40%, compounded continuously. What is the effective interest rate earned by this investment? a. 49.2% b. 39.2% C. 59.2% d. 69.2% 14. A is an interest bearing account into which regular deposits (payments) are made in order to accumulate a certain desired amount. a. Capital Recovery b. Uniform payment series C. Sinking fund d. Gradient series

Answer 1

Answer ) Option C - Compunding

Explanantion: The present value will be compunded to get the future value at specific interest rate and period. The interest will accrue to present value and invested at same interest rate. Thats how, present value will get compounded in future.

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