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<strong>FIN</strong> <strong>100</strong> <strong>Quiz</strong> 4<br />
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<strong>FIN</strong> <strong>100</strong> <strong>Quiz</strong> 4<br />
This quiz consist of 10 multiple choice questions and covers the material in Chapter 9. Be sure you are in<br />
Chapter 9 when you take the quiz.<br />
1. When the amount earned on a deposit has become part of the principal at the end of a specified time<br />
period the concept is called<br />
2. A famous athlete is awarded a $9 million contract that stipulates equal payments to be made monthly<br />
over a period of five years. To determine what such a contract is worth today, you would need to use:<br />
3. Jill Clinton puts $1,000 in a savings passbook that pays 4% compounded quarterly. How much will she<br />
have in her account after five years?<br />
4. If the stated or nominal interest rate is 10 percent and the inflation rate is 5 percent, the differential<br />
compounding rate would be ________ percent<br />
5. For positive interest rates, the present value interest factor is<br />
6. Interest earned only on an investment’s principal or original amount is referred to as:<br />
7. An investment will mature in 20 years. Its maturity value is $1,000. If the discount rate is 7%, what is<br />
the present value of the investment?<br />
8. An annuity with an infinite life is called a (n)<br />
9. The basic future and present value equations contain four variables. Which one of the following<br />
is notincluded?<br />
10. A series of equal payments or receipts that occur at the beginning of each of a number of time<br />
periods is referred to as:
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