11) The future value of a dollar ________ as the : 1907279
11) The future value of a dollar ________ as the interest rate increases and ________ the farther in the future an initial deposit is to be received.
A) decreases; decreases
B) decreases; increases
C) increases; increases
D) increases; decreases
12) The future value of $100 received today and deposited in an account for four years paying semiannual interest of 6 percent is:
13) The future value of $200 received today and deposited for three years in an account which pays semiannual interest of 8 percent is:
14) Joe expects to receive a gift of $1,000 when he graduates one year from today. Joe can invest his gift at 6% compounded annually and he would like to use the funds in four years to purchase an engagement ring for Mabel. How much will he have in four years to spend on a ring?
15) Molly Costner deposits $2,500 in her checking account today. Her checking account pays interest of 2.5% compounded annually. Assuming Molly does not withdraw any funds and does not deposit any additional funds, how much will be in her account in 25 years?
16) Kayla hopes to purchase a new car in five years. If she deposits $10,000 today in an account that pays 7% compounded quarterly, how much will she be able to spend on the new car in five years?
17) If interest rates are 5%, which of the following will produce the largest amount of money in four years?
A) $500 earning simple interest
B) $400 with interest compounded annually
C) $300 with interest compounded semiannually
D) $100 with interest compounded quarterly
E) $25 with interest compounded monthly
18) What is the effective interest rate of 4% compounded quarterly?
19) At 15% interest compounded annually, approximately how long will it take Walter to double his money?
A) About five years
B) About three years
C) About seven years
D) About fifteen years
E) About fifty years
20) How much will you need in 30 years to have the same purchasing power that $150 has today, if inflation averages 4% per year?