# Present Value Of An Investment Be The Highest Assuming The Same Annual Interest Rate

te: It is recommended that you save your response as you complete each question.

### Question 1 (1 point)

Underwhich of the following discounting methods will the present value of aninvestment be the highest, assuming the same annual interest rate?

Question 1 options:

Yearly

Monthly

Continuous

Quarterly

### Question 2 (1 point)

Future value:Larry James is planning to invest \$25,400 today in a mutual fund thatwill provide a return of 0.10 each year.  What will be the value of theinvestment in 10 years?

### Question 3 (1 point)

Which of the following is a similar concept to the compound growth rate of money?

Question 3 options:

The discount rate on a capital budgeting project.

The internal rate of return on an investment.

The yield on a bond.

All of the above.

### Question 4 (1 point)

Youplan to buy a new car. The price is \$30,000 and you will make a downpayment of \$4,000. Your annual interest rate is 10% and you intend topay for the car over five years. What will be your monthly payment?

Question 4 options:

\$552.42

\$566.67

\$637.41

\$433.33

### Question 5 (1 point)

StanleyRoper has \$2,500 that he is looking to invest. His brother approachedhim with an investment opportunity that could give Patrick \$4,800 in 4years. What interest rate would the investment have to yield in orderfor Stanley’s brother to deliver on his promise? (Answer needs to bestated as a decimal. For example:  .1089)

### Question 6 (1 point)

ChuckBrown will receive from his investment cash flows of \$3,125 \$3,470, and\$3,850 at the end of years 1, 2 and 3 respectively. If he can earn 7.5percent on any investment that he makes, what is the future value of hisinvestment cash flows at the end of three years? (Round to the nearestdollar.)

### Question 7 (1 point)

Yourbrother has asked you to help him with choosing an investment. He has\$7,500 to invest today for a period of two years. You identify a bank CDthat pays an interest rate of 0.0500 with the interest being paidquarterly. What will be the value of the investment in two years?