FIN 300 QUIZ 1 QUESTIONS WITH CORRECT ANSWERS

FIN 300 QUIZ 1 QUESTIONS WITH
CORRECT ANSWERS

A common error made when solving a future of an annuity problem is:

- Using factor tables to help solve the problem
- Dividing the annual deposit by the number of years before calculating the problem
- Using a financial calculator to help solve the problem
- Multiplying the number of years and the interest rate before calculating the problem
- Multiplying the annual deposit and the number of years before calculating the problem
- Answer- Multiplying the annual deposit and the number of years before calculating the
problem

The variables in a future value of a lump sum include all of the following, except:

- Future value
- Time period
- Interest rate
- Payments - Answer- NOT Future value

The variable that you are solving for in a future value of a lump sum problem is:

- Present Value
- Time period
- Interest rate
- Payments
- Future value - Answer- Future value

How would a decrease in the interest rate effect the future value of a lump sum, single
amount problem (all other variables remain the same)?

- Increase the time needed to save
- Increase the present value
- Decrease the future value
- Decrease the present value
- Increase the future value - Answer- NOT Increase the future value

The variables in a present value of an annuity problem include all of the following,
except: