Quiz Week 1
Question 1
(5 points) $100 today is worth the SAME as $100 tomorrow.
Your Answer
Score
Explanation
True
False
Correct
5.00
Correct.
Total
5.00 / 5.00
Question Explanation
We have assumed time value of money is positive.
Question 2
(5 points) At an interest rate of 10% it is better to have $200 today than $200 in 2 years.
Your Answer
Score
Explanation
False
True
Correct
5.00
Correct.
Total
5.00 / 5.00
Question Explanation
All about compounding.
Question 3
(5 points) Shawn wants to buy a new telescope. He estimates that it will take him one year to save the money and that the telescope will cost $250. At an interest rate of 5%, how much does Shawn need to set aside today to purchase the telescope in one year? (Enter just the number in dollars without the $ sign or a comma and round off decimals.)
Answer for Question 3
You entered:
Your Answer
Score
Explanation
238
Correct
5.00
Correct.
Total
5.00 / 5.00
Question Explanation
Simple PV calculation.
Question 4
(10 points) Jeff has $1,200 that he invests in a safe financial instrument expected to return 4% annually. Marge has $600 and invests in a more risky venture that is expected to return 8% annually. Who has more after 28 years? And how much does he/she have in FV terms?
Your Answer
Score
Explanation
Marge; $57,203.3
Marge; $5,176.26
Correct
10.00
Correct.
Jeff; $3,598.44
Jeff; $59,961.10
Total
10.00 / 10.00
Question Explanation
FV calculations of simple one-shot cash flows.
Question 5
(10 points) Don has just received a cash gift of $70,000 from his rich eccentric uncle. He wants to set it aside to pay for his daughter Cynthia's college education. Cynthia will begin college in 10 years and Don's financial advisor says that she can earn 8% interest on an investment in a special college fund. How much will Don have in the fund when Cynthia begins college? (Enter just the number in dollars without the $ sign or a comma and round off decimals.)
Answer for Question 5
You entered:
Your
(5 points) $100 today is worth the SAME as $100 tomorrow.
Your Answer
Score
Explanation
True
False
Correct
5.00
Correct.
Total
5.00 / 5.00
Question Explanation
We have assumed time value of money is positive.
Question 2
(5 points) At an interest rate of 10% it is better to have $200 today than $200 in 2 years.
Your Answer
Score
Explanation
False
True
Correct
5.00
Correct.
Total
5.00 / 5.00
Question Explanation
All about compounding.
Question 3
(5 points) Shawn wants to buy a new telescope. He estimates that it will take him one year to save the money and that the telescope will cost $250. At an interest rate of 5%, how much does Shawn need to set aside today to purchase the telescope in one year? (Enter just the number in dollars without the $ sign or a comma and round off decimals.)
Answer for Question 3
You entered:
Your Answer
Score
Explanation
238
Correct
5.00
Correct.
Total
5.00 / 5.00
Question Explanation
Simple PV calculation.
Question 4
(10 points) Jeff has $1,200 that he invests in a safe financial instrument expected to return 4% annually. Marge has $600 and invests in a more risky venture that is expected to return 8% annually. Who has more after 28 years? And how much does he/she have in FV terms?
Your Answer
Score
Explanation
Marge; $57,203.3
Marge; $5,176.26
Correct
10.00
Correct.
Jeff; $3,598.44
Jeff; $59,961.10
Total
10.00 / 10.00
Question Explanation
FV calculations of simple one-shot cash flows.
Question 5
(10 points) Don has just received a cash gift of $70,000 from his rich eccentric uncle. He wants to set it aside to pay for his daughter Cynthia's college education. Cynthia will begin college in 10 years and Don's financial advisor says that she can earn 8% interest on an investment in a special college fund. How much will Don have in the fund when Cynthia begins college? (Enter just the number in dollars without the $ sign or a comma and round off decimals.)
Answer for Question 5
You entered:
Your