1. To determine the present value of a future amount, one should _________ the future cash flows.
annuitize
compound
discount
multiply
2. Your aunt places $13,000 into an account earning an interest rate of 7% per year. After five years the account will be valued at $18,233.17. Which of the following statements is correct?
The present value is $13,000, the time period is seven years, the present value is $18,233.17, and the interest rate is 5%.
The future value is $13,000, the time period is five years, the principal is $18,233.17, and the interest rate is 7%.
The principal is $13,000, the time period is five years, the future value is $18,233.17, and the interest rate is 7%.
The principal is $13,000, the time period is seven years, the future value is $18,233.17, and the interest rate is 5%.