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Question 1

Formula of compounding interest

Answer 1

P (1 + r)^n

Question 2

Deducting the investment or principal needed for the project or investment from this total present value, the result is the ____

Answer 2

Net present value

Question 2

is an economic disorder characterized by continuous increase in the price level of goods and services without the corresponding increase in the production of these goods and services?

Answer 2

Inflation

Question 3

The concept of the ____ of money is based on the notion that a peso received today is worth more than a peso received in the future.

Answer 3

Time – value

Question 3

The interest is computed by adding the interest to the principal to be used as the new basis or new principal for the succeeding year or period.

Answer 3

Compound interest

Question 4

It has a time value, if kept in a vault it loses value over time.

Answer 4

Money

Question 5

Formula of future value

Answer 5

PV \times (1 + r)^n

Question 6

refers to the amount of money an investment will grow to at a specific point in the future, considering a certain rate of return or interest rate.

Answer 6

Future value

Question 7

is an annuity with a payment due immediately at the beginning of each period?

Answer 7

Annuity due

Question 8

It answers the question how much is the worth today of an amount that will be received in the future.

Answer 8

Present value

Question 9

is a straightforward way to calculate interest on a loan or investment.

Answer 9

Simple interest

Question 10

Formula for present value

Answer 10

CF [1 / (1+r)^n]

Question 11

is the value at the current time of the cash flow expected to be received after some period of time?

Answer 11

Present value

Question 12

is used in financial decision-making, particularly in evaluating investment alternatives.

Answer 12

Net present value

Question 13

In the formula P x R x T what does T stands for

Answer 13

Time

Question 14

It is synonymous with the terms “terminal value” and “maturity value.”

Answer 14

Future value

Question 15

Annuity problems involves a series of equal of periodic payments or receipts called ___

Answer 15

Rent

Question 15

defined as a stream or a series of payments made or receipt receive over time.

Answer 15

Annuity

Question 16

An annuity in which the cash flows, or payments, occur at the end of the period, may be paid monthly, quarterly, semi-annually, or annually.

Answer 16

Ordinary annuity

Question 17

is the process in which future value is determined?

Answer 17

Compounding or accumulation

Question 18

Simple interest formula

Answer 18

P × R × T

Question 19

In the formula P x R x T what does P stands for

Answer 19

Principal

Question 20

Alex deposits $1,000 in a bank account that earns simple interest at a rate of 5% per year. How much interest will he earn after 3 years?

Answer 20

$150

Question 21

Sarah borrowed $800 at a simple interest rate of 4% per year for 2 years. How much interest will she pay?

Answer 21

$64

Question 21

Emma invested $1,500 at a simple interest rate of 3% per year. How much interest will she earn in 5 years?

Answer 21

$225

Question 22

A sum of $800 is invested at 5% compound interest per year. What will be the amount after 2 years?

Answer 22

$882

Question 23

If $1,000 is invested at 10% interest compounded annually for 2 years, what is the compound interest?

Answer 23

$210

Question 24

If $2,000 is invested at 6% per annum compounded annually, what will be the amount after 3 years?

Answer 24

$2,382.40

Question 25

How much compound interest is earned on $1,500 at 8% per annum compounded annually for 2 years?

Answer 25

$249.60

Question 26

What is the main difference between simple interest and compound interest?

Answer 26

Compound interest is calculated on principal and previously earned interest