ECO 101 - If you knew that an investment was going to pay

Question 1

1. If you knew that an investment was going to pay you $128 in 5 years, and you knew that the annual interest rate over that time would be 5 percent, you could calculate the present value to be:
2. A.$99.
3. B.$90.
4. C.$105.
5. D.None of these is true.

12 points

QUESTION 2

1. The amount of interest owed on a loan of $100,000 after a year at an interest rate of 3 percent is:
2. A.$3,000.
3. B.$30,000.
4. C.$103,000.
5. D.$100,300.

12 points

QUESTION 3

1. The value of a loan of $100,000 after a year at 5 percent interest is:
2. A.$5,000.
3. B.$95,000.
4. C.$105,000.
5. D.None of these is true.

12 points

QUESTION 4

1. The present value of $300,000 in 12 years at 4 percent interest is approximately:
2. A.$187,379.
3. B.$312,451.
4. C.$427,126.
5. D.None of these statements is true.

12 points

QUESTION 5

1. Which of the following is closest to the future value of a $100 deposit earning 5 percent interest annually after 5 years?
2. A.$125
3. B.$128
4. C.$1,268
5. D.$105

12 points

QUESTION 6

1. Different banks:
2. A.may offer loans at different rates.
3. B.all offer loans at the same interest rate.
4. C.are mandated to follow the Fed's set interest rate.
5. D.never offer loans at exactly the same rates.

12 points

QUESTION 7

1. It is difficult when you make decisions that require you to weigh uncertain future costs and benefits because:
2. A.you can't directly compare costs and benefits that show up now with those that show up in the future.
3. B.the value of money changes over time.
4. C.the future is uncertain.
5. D.All of these make it difficult.

12 points

QUESTION 8

1. When people are deciding whether to deposit money in a bank:
2. A.they will respond exactly the same to any given interest rate.
3. B.some will require a higher interest rate to deposit the same amount of money.
4. C.no one ever deposits exactly the same as another person in response to the same interest rate.
5. D.they will deposit the same amount in response to any given interest rate.

12 points

QUESTION 9

1. Value of a loan amount X with interest r after one period equals:
2. A.(X * 1)/(X * r)
3. B.X * (1 + r)
4. C.X/(1 + r)
5. D.All of these are true.

12 points

QUESTION 10

1. Which of the following is closest to the future value of a $4,000 deposit earning 2 percent interest annually after 10 years?
2. A.$4,122
3. B.$4,876
4. C.$5,025
5. D.$4,805

12 points