11.The value of a sun after investing over one or more periods is called A. Present value B. Discount Value C. Compound and future value D. None 12. You plan to make a series of deposits in an individual retirement account. You will deposit E1,000 today, ￡2,000 in two years, and E2,000 in five years. If you-withdraw fl ,500 in three years and 1,000 in seven years assuming no withdrawal penalties how much will you have after eight years if the interest rate is 7 per cent? A. 3.995 B. 2.325 C. 5.000 D. 6.005 13. Assume you want to buy an apartment. Apartment costs about 100.000.-TL. The interest rate is 18 per cent, and there are five years. The payments are all equal, find the yearly payment of the loan you get from your bank? A. 22.000 B. 31.978 C. 35.000 D. 33.033 14. At what point in time are cash flows assumed to occur (unless you are told otherwise) if you are undertaking present value calculations? A. Cash flows come in randomly B. At the end of the year C. At the start of the year D.None

Question

11.The value of a sun after investing over one or more periods is called A. Present value B. Discount Value C. Compound and future value D. None 12. You plan to make a series of deposits in an individual retirement account. You will deposit E1,000 today, ￡2,000 in two years, and E2,000 in five years. If you-withdraw fl ,500 in three years and 1,000 in seven years assuming no withdrawal penalties how much will you have after eight years if the interest rate is 7 per cent? A. 3.995 B. 2.325 C. 5.000 D. 6.005 13. Assume you want to buy an apartment. Apartment costs about 100.000.-TL. The interest rate is 18 per cent, and there are five years. The payments are all equal, find the yearly payment of the loan you get from your bank? A. 22.000 B. 31.978 C. 35.000 D. 33.033 14. At what point in time are cash flows assumed to occur (unless you are told otherwise) if you are undertaking present value calculations? A. Cash flows come in randomly B. At the end of the year C. At the start of the year D.None

Answer 1

11. The correct answer is C. Compound and future value. The value of an investment after one or more periods is referred to as the compound and future value. This is because the investment earns interest on both the initial principal and the accumulated interest from previous periods.12. The correct answer is D. 6,005. To calculate the total amount after eight years, we need to consider the deposits and withdrawals along with the interest earned. The calculation involves finding the future value of each deposit and withdrawal separately, taking into account the interest rate of 7% per year. After performing the calculations, the total amount after eight years is approximately 6,005.13. The correct answer is B. 31,978. To find the yearly payment of the loan, we can use the formula for calculating the annuity payment. Given the total cost of the apartment (100,000 TL), the interest rate (18% per year), and the loan term (5 years), we can plug these values into the formula to find the yearly payment. The calculated yearly payment is approximately 31,978 TL.14. The correct answer is C. At the start of the year. In present value calculations, cash flows are assumed to occur at the start of the year unless otherwise specified. This assumption helps in calculating the present value of future cash flows by discounting them to their present value.

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