TCU Finance Exit Exam Questions and Correct Answers

TCU Finance Exit Exam Questions and Correct Answers Calculate the present value or future value of a lump (single) sum. - Correct Answer o PV = FV / (1+i)^n o FV = PV(1+i)^n Find number of periods or interest rate for lump sum cash flow if given PV and FV - Correct Answer Calculator time(see above relationships) Calculate PV or FV of an annuity and of an annuity due - Correct Answer Remember to set TVM: PMT:end/beginning If solving for FV, set PV to 0 If solving for PV, set FV to 0 PMT=annual payment FV=0 or solve for i=market rate PV=0 or solve for Find PMT, interest rate, or number of payments in annuity or annuity due problem with annual or non-annual payments - Correct Answer Remember to adjust for non-annual payments Find the PV, PMT, or interest rate for a perpetuity - Correct Answer Perpetuity: PV=PMT/interest rate Calculate the effective annual rate for an interest rate compounded more than one time per year - Correct Answer o ((1+ i/n)^n) - 1 o I = stated annual interest rate o N = number