« previous next »

Author Question: A two-year investment of 3500 is made today at an annual interest rate of 5.75. Which of the ... (Read 38 times)

jhjkgdfhk

  • Hero Member
  • *****
  • Posts: 569
on: Jul 10, 2018
A two-year investment of 3500 is made today at an annual interest rate of 5.75. Which of the following statements is true?
 
  A) The future value would be greater if the interest rate was higher.
  B) The present value would be greater if the interest rate was higher.
  C) The future value would be greater if the interest rate was lower.
  D) The future value does not change as the interest rate changes.

Question 2

Which of the following will result in a future value greater than 100?
 
  A) PV = 50, r = an annual interest rate of 10, and n = 8 years.
  B) PV = 75, r = an annual interest rate of 12, and n = 3 years.
  C) PV = 90, r = an annual interest rate of 14, and n = 1 year.
  D) All of the future values are greater than 100.


Jmfn03

  • Sr. Member
  • ****
  • Posts: 323
Reply #1 on: Jul 10, 2018
Answer to Question 1

Answer: A

Answer to Question 2

Answer: D
Explanation: D) FV = PV  (1 + r)n = 50  (1.10)8 = 107.18
75  (1.12)3 = 105.37
90  (1.14)1 = 102.60


Related Topics

Need homework help now?

Ask unlimited questions for free

Ask a Question
« previous next »
 

Did you know?

Critical care patients are twice as likely to receive the wrong medication. Of these errors, 20% are life-threatening, and 42% require additional life-sustaining treatments.

Did you know?

According to the National Institute of Environmental Health Sciences, lung disease is the third leading killer in the United States, responsible for one in seven deaths. It is the leading cause of death among infants under the age of one year.

Did you know?

About 80% of major fungal systemic infections are due to Candida albicans. Another form, Candida peritonitis, occurs most often in postoperative patients. A rare disease, Candida meningitis, may follow leukemia, kidney transplant, other immunosuppressed factors, or when suffering from Candida septicemia.

Did you know?

It is believed that humans initially contracted crabs from gorillas about 3 million years ago from either sleeping in gorilla nests or eating the apes.

Did you know?

Oliver Wendell Holmes is credited with introducing the words "anesthesia" and "anesthetic" into the English language in 1846.

Changes in boreal forest composition along a chronosequence in Quebec. Dates refer to the year of th Changes in boreal forest composition along a chronosequence in Quebec. Dates refer to the year of th
The Morris Adjustable Chair, designed by Philip Webb, made by Morris, Marshall, Faulkner & Co. The Morris Adjustable Chair, designed by Philip Webb, made by Morris, Marshall, Faulkner & Co.
For the 2-year-old, encounters with peers provide valuable practice in communication and social ... For the 2-year-old, encounters with peers provide valuable practice in communication and social ...
Use dye specifically made for coolant when checking for leaks using a black light. Use dye specifically made for coolant when checking for leaks using a black light.
Types of ecosystem service vs. total global value per year Types of ecosystem service vs. total global value per year
Compound interest Compound interest
Video: Cellular Respiration & Glucose Mobilization (Glucose transport & Phosphorylation of Glucose)

For a complete list of videos, visit our video library