Sample Questions

Principles of Finance

Future Values of Amounts

Scenario I
A financial services company offers savings vehicles, such as CDs, to its clients. CD A has an amount of \$2,000, a term of 1 year, and an annual interest of 5% paid annually. CD B has an amount of \$5,000, a term of 3 years, and an annual interest of 6% paid annually. CD C has an amount of \$8,000, a term of 4 years, and an annual interest of 7% paid annually. CD D has an amount of \$12,000, a term of 6 years, and an annual interest of 8% paid annually. CD E has an amount of \$15,000, a term of 10 years, and an annual interest of 10% paid annually.

1) What is the future value of CD A?

``` a)  \$2,000.
```
``` b)  \$2,500.
```
``` c)  \$2,100.
```
``` d)  \$1,905.
```
``` e)  None of the above.
```

2) What is the future value of CD B?

``` a)  \$2,955.
```
``` b)  \$5,955.
```
``` c)  \$5,595.
```
``` d)  \$5,000.
```
``` e)  None of the above.
```

3) What is the future value of CD C?

``` a)  \$10,527.
```
``` b)  \$10,955.
```
``` c)  \$10,844.
```
``` d)  \$10,488.
```
``` e)  None of the above.
```

4) What is the future value of CD D?

``` a)  \$19,440.
```
``` b)  \$19,044.
```
``` c)  \$19,126.
```
``` d)  \$20,105.
```
``` e)  None of the above.
```

5) What is the future value of CD E?

``` a)  \$38,910.
```
``` b)  \$39,910.
```
``` c)  \$39,810.
```
``` d)  \$38,190.
```
``` e)  None of the above.
```

Scenario II
Person Alpha deposits \$20,000 into an account that pays 8% annual interest on an annual basis and holds it for 9 years. Person Beta deposits \$25,000 into an account that pays 9% annual interest on an annual basis and holds it for 12 years. Person Gamma deposits \$30,000 into an account that pays 12% annual interest on an annual basis and holds it for 15 years. Person Delta deposits \$40,000 into an account that pays 6% annual interest on an annual basis and holds it for 20 years. Person Epsilon deposits \$50,000 into an account that pays 14% annual interest on an annual basis and holds it for 6 years.

6) What is the future value of the deposit for person Alpha?

``` a)  \$39,980.
```
``` b)  \$39,890.
```
``` c)  \$38,990.
```
``` d)  \$39,880.
```
``` e)  None of the above.
```

7) What is the future value of the deposit for person Beta?

``` a)  \$70,731.
```
``` b)  \$69,328.
```
``` c)  \$70,317.
```
``` d)  \$69,832.
```
``` e)  None of the above.
```

8) What is the future value of the deposit for person Gamma?

``` a)  \$164,536.
```
``` b)  \$146,208.
```
``` c)  \$164,208.
```
``` d)  \$164,280.
```
``` e)  None of the above.
```

9) What is the future value of the deposit for person Delta?

``` a)  \$119,044.
```
``` b)  \$119,440.
```
``` c)  \$128,842.
```
``` d)  \$128,284.
```
``` e)  None of the above.
```

10) What is the future value of the deposit for person Epsilon?

``` a)  \$119,750.
```
``` b)  \$109,750.
```
``` c)  \$109,507.
```
``` d)  \$113,045.
```
``` e)  None of the above.
```

Scenario III
A financial services company offers savings vehicles, such as CDs, to its clients. CD A has an amount of \$2,000, a term of 1 year, and an annual interest of 5% paid quarterly. CD B has an amount of \$5,000, a term of 3 years, and an annual interest of 6% paid semi-annually. CD C has an amount of \$8,000, a term of 4 years, and an annual interest of 7% paid semi-annually. CD D has an amount of \$12,000, a term of 6 years, and an annual interest of 8% paid monthly. CD E has an amount of \$15,000, a term of 10 years, and an annual interest of 10% paid semi-annually.

11) What is the future value of CD A?

``` a)  \$2,102.
```
``` b)  \$2,100.
```
``` c)  \$2,110.
```
``` d)  \$2,000.
```
``` e)  None of the above.
```

12) What is the future value of CD B?

``` a)  \$5,955.
```
``` b)  \$5,790.
```
``` c)  \$5,970.
```
``` d)  \$5,570.
```
``` e)  None of the above.
```

13) What is the future value of CD C?

``` a)  \$10,536.
```
``` b)  \$10,955.
```
``` c)  \$10,844.
```
``` d)  \$10,488.
```
``` e)  None of the above.
```

14) What is the future value of CD D?

``` a)  \$19,632.
```
``` b)  \$19,044.
```
``` c)  \$19,362.
```
``` d)  \$19,326.
```
``` e)  None of the above.
```

15) What is the future value of CD E?

``` a)  \$39,810.
```
``` b)  \$39,910.
```
``` c)  \$38,900.
```
``` d)  \$39,800.
```
``` e)  None of the above.
```

Scenario IV
Person Alpha deposits \$20,000 into an account that pays 8% annual interest on a semi-annual basis and holds it for 12 years. Person Beta deposits \$25,000 into an account that pays 10% annual interest on a quarterly basis and holds it for 8.5 years. Person Gamma deposits \$30,000 into an account that pays 12% annual interest on a quarterly basis and holds it for 16 years. Person Delta deposits \$40,000 into an account that pays 6% annual interest on a monthly basis and holds it for 20 years. Person Epsilon deposits \$50,000 into an account that pays 14% annual interest on a semi-annual basis and holds it for 6.5 years.

16) What is the future value of the deposit for person Alpha?

``` a)  \$50,266.
```
``` b)  \$51,266.
```
``` c)  \$51,226.
```
``` d)  \$50,364.
```
``` e)  None of the above.
```

17) What is the future value of the deposit for person Beta?

``` a)  \$57,883.
```
``` b)  \$57,300.
```
``` c)  \$56,205.
```
``` d)  \$57,383.
```
``` e)  None of the above.
```

18) What is the future value of the deposit for person Gamma?

``` a)  \$189,933.
```
``` b)  \$193,602.
```
``` c)  \$183,912.
```
``` d)  \$198,933.
```
``` e)  None of the above.
```

19) What is the future value of the deposit for person Delta?

``` a)  \$130,482.
```
``` b)  \$131,627.
```
``` c)  \$132,840.
```
``` d)  \$132,408.
```
``` e)  None of the above.
```

20) What is the future value of the deposit for person Epsilon?

``` a)  \$119,490.
```
``` b)  \$117,180.
```
``` c)  \$120,490.
```
``` d)  \$120,940.
```
``` e)  None of the above.
```

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