Flagler College

BUS 301

Chapter 4 Quiz

Question1)Interest can be thought of as______________________to borrow money.          

Question 2

The formula for simple interest is              

Question 3

If you are BORROWING, do you want a simple interest loan or compound interest loan?

 Question 4

If you are SAVING, do you want to receive simple interest or compound interest?

Question 5

An annuity can be car payments if paid or                                                    payments if received.

Question 6

An annuity due is when the payment is made at the                                 payment (like rent).              

Question 7

An ordinary annuity is when the payment is made at the                        of the period (bond coupon payment received).

Question 8

Today's value of money received at some point in the future is  

Question 9

With a risk-free investment FV will be            than PV. (Always!)    

Question 10

Intra-year compounding occurs when interest is compounded more frequently than once a year. This serves to INCREASE or DECREASE the end result?               

Question 11

A perpetuity is a fixed cash flow received over a(n)                               number of periods      

Question 12