D076 Finance Skills for Managers
Module 5 Question and answers 100%
correct 2025/2026
Ordinary annuity
What is the name for a series of equal
payments made at the end of
consecutive periods over a fixed
Future value
length of time?
1. If you invest $10,000 today and then $5,000
each year for the next 5 years into an
investment
with an interest rate of 4%, you can
withdraw Time value of money
$39,248.14 in 5 years. What does
$39,248.14 rep-resent?
A 30-year mortgage
2. What is the name for the concept that a
dollar today is worth more than a dollar
in the future?
3. You are considering purchasing a house for
$250,000. You have two options to finance
it. One is a 20-year mortgage with an
interest rate of 3.5%, and the other is a 30-
year mortgage with an interest rate of
3.5%. Which mortgage option requires you
to pay more in total interest?
4. Why does the time value of money play an impor- Because the benefits
of invest-
tant role in financial decision- ments received at ditterent
making? times are comparable only
when you consider the time
value of money
5. You are calculating the present value of an
1/
3
Module 5 Question and answers 100%
correct 2025/2026
Ordinary annuity
What is the name for a series of equal
payments made at the end of
consecutive periods over a fixed
Future value
length of time?
1. If you invest $10,000 today and then $5,000
each year for the next 5 years into an
investment
with an interest rate of 4%, you can
withdraw Time value of money
$39,248.14 in 5 years. What does
$39,248.14 rep-resent?
A 30-year mortgage
2. What is the name for the concept that a
dollar today is worth more than a dollar
in the future?
3. You are considering purchasing a house for
$250,000. You have two options to finance
it. One is a 20-year mortgage with an
interest rate of 3.5%, and the other is a 30-
year mortgage with an interest rate of
3.5%. Which mortgage option requires you
to pay more in total interest?
4. Why does the time value of money play an impor- Because the benefits
of invest-
tant role in financial decision- ments received at ditterent
making? times are comparable only
when you consider the time
value of money
5. You are calculating the present value of an
1/
3
