Finance Quiz
Question 1 .0.5 out of 0.5 points What is the future value of $1,200 a year for 40 years at 8 percent interest? Assume annual compounding.
Answer
Selected Answer: c. $310,868
Correct Answer: c. $310,868 . Question 2 .0.5 out of 0.5 points Gerold invested $6,200 in an account that pays 5 percent simple interest. How much money will he have at the end of ten years?
Answer
Selected Answer: b. $9,300
Correct Answer: b. $9,300 . Question 3 .0.5 out of 0.5 points You are the beneficiary of a life insurance policy. The insurance company informs you that you have two options for receiving the insurance proceeds. You can receive a lump sum of $200,000 today or receive payments of $1,400 a month for 20 years. You can earn 6 percent on your money. Which option should you take and why?
Answer
Selected Answer: b. You should accept the $200,000 because the payments are only worth $195,413 to you today.
Correct Answer: b. You should accept the $200,000 because the payments are only worth $195,413 to you today. . Question 4 .0 out of 0.5 points You just received a $5,000 gift from your grandmother. You have decided to save this money so that you can gift it to your grandchildren 50 years from now. How much additional money will you have to gift to your grandchildren if you can earn an average of 8.5 percent instead of just 8 percent on your savings?
Answer
Selected Answers: b. $58,811.99 Correct Answers: d. $60,923.52
. Question 5 .0 out of 0.5 points You own a classic automobile that is currently valued at $147,900. If the value increases by 6.5 percent annually, how much will the automobile be worth ten years from now?
Answer
Selected Answer: c. $251,008.17
Correct Answer: b. $277,628.63 . Question 6 .0.5 out of 0.5 points You just won the grand prize in a national writing contest! As your prize, you will receive $2,000 a month for ten years.
Answer
Selected Answer: c. $310,868
Correct Answer: c. $310,868 . Question 2 .0.5 out of 0.5 points Gerold invested $6,200 in an account that pays 5 percent simple interest. How much money will he have at the end of ten years?
Answer
Selected Answer: b. $9,300
Correct Answer: b. $9,300 . Question 3 .0.5 out of 0.5 points You are the beneficiary of a life insurance policy. The insurance company informs you that you have two options for receiving the insurance proceeds. You can receive a lump sum of $200,000 today or receive payments of $1,400 a month for 20 years. You can earn 6 percent on your money. Which option should you take and why?
Answer
Selected Answer: b. You should accept the $200,000 because the payments are only worth $195,413 to you today.
Correct Answer: b. You should accept the $200,000 because the payments are only worth $195,413 to you today. . Question 4 .0 out of 0.5 points You just received a $5,000 gift from your grandmother. You have decided to save this money so that you can gift it to your grandchildren 50 years from now. How much additional money will you have to gift to your grandchildren if you can earn an average of 8.5 percent instead of just 8 percent on your savings?
Answer
Selected Answers: b. $58,811.99 Correct Answers: d. $60,923.52
. Question 5 .0 out of 0.5 points You own a classic automobile that is currently valued at $147,900. If the value increases by 6.5 percent annually, how much will the automobile be worth ten years from now?
Answer
Selected Answer: c. $251,008.17
Correct Answer: b. $277,628.63 . Question 6 .0.5 out of 0.5 points You just won the grand prize in a national writing contest! As your prize, you will receive $2,000 a month for ten years.