What is the interest rate on a three-year investment with a

Question

1. A business acquaintance promises to deliver a $20 bill to you one year from today. How much should you be willing to pay today for this promise?

• More than $20
• Exactly $20
• Less than $20

2. What is the present value of $1,000 received three years from today if interest rates are currently 6 percent?

• $943.40
• $839.62
• $1,191.02
• $1,000.00

3. What is the interest rate on a three-year investment with a future value of $1000 and a present value of $863.84?

• 5%
• 10%
• 7.36%
• 2.54%

4. The product rule of exponents says that when multiplying two powers that have the same base, you need to ________.

• divide the exponents
• add the exponents
• multiply the exponents
• subtract the exponents

5. The fifth root of fifteen is equal to ________.

• 15 raised to the power of 15
• one fifth of 15
• 15 raised to the power of 1/5
• one fifteenth of 15