1. What term describes the value of money in some time period beyond time 0?
1) lump sum
2) present value
3) future value
4) current sum
2. Effective interest rates are:
1) increased by the charging of discount points.
2) decreased by the charging of discount points.
3) unaffected by the charging of discount points.
4) may be increased or decreased by discount points, depending upon whether the points are currently deductible for income tax purposes.
3. You have decided that upon retirement you will buy a mansion in Hawaii with cold cash after 15 years. How much do you need to save every year to have $311,288 by then if the interest rate is 10.1%
1) $11,664
2) $12,636
3) $9,720
4) $10,692
5) None of the above