Name: Assignment #2

Instructions:  

Question 1   Multiple Answer (1.0000 points)
  Question: Which of the following discounting methods at a bank would result in the greatest present value on a $10,000 to be received at the end of the year and earning 8%?
 
    Annual discounting
Semi-annual discounting
Quarterly discounting
Monthly discounting
Daily discounting
 

 
Question 2   Multiple Answer (1.0000 points)
  Question: If you receive $1,000 from an investment in five years, how much is it worth today if you wish to make 8 percent compounded annually?
 
    $1,469.33
$1,000
$920
$680.58
$600
 

 
Question 3   Multiple Answer (1.0000 points)
  Question: If you receive $1,000 from an investment in five years,how much is it worth today if you wish to make 8 percent compounded monthly?
 
    $1,000
$920
$680.58
$671.21
$600
 

 
Question 4   Multiple Answer (1.0000 points)
  Question: If you receive $1,000 every year at the end of the year each year for five years, what should you pay for the investment if you wish to earn 8% per year compounded annually?
 
    $5,000
$3,992.71
$3,225
$3,000
$2,992.71
 

 
Question 5   Multiple Answer (1.0000 points)
  Question: How much would you have to pay each year on a $1000 loan to pay it off in five years if the lender charges you 8% interest per year, compounded annually?
 
    $120
$200
$243.32
$250.46
$280