Question

QUESTION 1

1. Marco is investing $5 today at 7 percent interest so he can have $35 later. This $35 is referred to as the:

		true value.
		future value.
		present value.
		discounted value.
		complex value.

5 points   

QUESTION 2

1. Tomas earned $89 in interest on his savings account last year and has decided to leave the $86 in his account this coming year so it will earn interest. This process of earning interest on prior interest earnings is called:

		discounting.
		compounding.
		duplicating.
		multiplying.
		indexing.

5 points   

QUESTION 3

1. Katlyn needs to invest $5,318 today in order for her savings account to be worth $8,000 six years from now. Which one of the following terms refers to the $5,318?

		Present value
		Compound value
		Future value
		Complex value
		Factor value

Answer 1

1)
Future value is the value of present $ in future invested at rate r and time t.
Hence, correct option is “future value”
2)

Correct option is “compounding”
3)
Future value is the value of present $ in future invested at rate r and time t.
Correct option is “Present value”

*Please rate thumbs up