« 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 87 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?

Approximately 70% of expectant mothers report experiencing some symptoms of morning sickness during the first trimester of pregnancy.

Did you know?

Looking at the sun may not only cause headache and distort your vision temporarily, but it can also cause permanent eye damage. Any exposure to sunlight adds to the cumulative effects of ultraviolet (UV) radiation on your eyes. UV exposure has been linked to eye disorders such as macular degeneration, solar retinitis, and corneal dystrophies.

Did you know?

There are immediate benefits of chiropractic adjustments that are visible via magnetic resonance imaging (MRI). It shows that spinal manipulation therapy is effective in decreasing pain and increasing the gaps between the vertebrae, reducing pressure that leads to pain.

Did you know?

Malaria was not eliminated in the United States until 1951. The term eliminated means that no new cases arise in a country for 3 years.

Did you know?

Less than one of every three adults with high LDL cholesterol has the condition under control. Only 48.1% with the condition are being treated for it.

During their annual migration, the entire population of Arctic terns move from the Arctic Ocean in t During their annual migration, the entire population of Arctic terns move from the Arctic Ocean in t
This 19-year-old in Wisconsin was given a reduced jail sentence for holding this sign in front of ... This 19-year-old in Wisconsin was given a reduced jail sentence for holding this sign in front of ...
Change in Annual Precipitation Over Land, 1901-2010 Change in Annual Precipitation Over Land, 1901-2010
The level of future emissions is closely linked to the rate of population growth The level of future emissions is closely linked to the rate of population growth
Debt payments of $1610.00 due today, $725.00 due in 101 days and $670.00 due in 296 days ... Debt payments of $1610.00 due today, $725.00 due in 101 days and $670.00 due in 296 days ...
Irene Manufacturing uses a predetermined overhead allocation rate based on a percentage of ... Irene Manufacturing uses a predetermined overhead allocation rate based on a percentage of ...
Video: Introduction to Genetics

For a complete list of videos, visit our video library