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FIN370 Phoenix Week 2 Business Finance Exam

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Week 2 knowledge check 1. If an average home in your town currently costs $350,000, and house prices are expected to grow at an average rate of 3 percent per year, what will an average house cost in "5" years? A) $405,168.75 B) $402,500.00 C) $507,500.00 D) $405,745.93 2. With regard to money deposited in a bank, future values are A) Equal to present values B) Larger than present values C) Are completely independent of present values D) Smaller than present values 3. How much would be in your savings account in 10 years after depositing $50 today if the bank pays 7 percent interest per year? A) $535.00 B) $98.36 C) $690.82 D) $35.00 4. Time value of money concepts can be used by A) All of these choices are correct B) Investors calculating a return on an investment C) Individuals doing personal financing planning D) CFPs and CEOs to make business decisions 5. How much would be in your savings account in 7 years after depositing $100 today if the bank pays 5 percent interest per year? A) $135.00 B) $140.71 C) $735.00 D) $814.20 6. Approximately how many years does it take to double a $475 investment when interest rates are 8 percent per year? A) B) C) D) 9 years 12 years 4.75 years 18 years Week 2 knowledge check 7. What is the present value of a $200 payment made in three years when the discount rate is 8 percent? A) $251.94 B) $515.42 C) $150.00 D) $158.77 8. What is the present value of a $500 payment made in four years when the discount rate is 8 percent? A) $367.51 B) $ ...
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