Finance Chapter 5/6
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)
Decrease the 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)?
Decrease the future value.
The variables in a present value of a lump sum problem include all of the following, except
Free Cash Flows
How would a decrease in the interest rate effect the present value of a lump sum, single amount problem (all other variables remain the same)
Increase the present value.
How would an increase in the interest rate effect the present value of an annuity problem (all other variables remain the same)
decrease the present value
The variable that you are solving for in a future value of a lump sum problem is
future value
A common error made when solving a future value of an annuity problem is:
Multiplying the annual deposit and the number of years before calculating the problem.
The variable that you are solving for in a present value of a lump sum problem is
Present value
The variables in a future value of a lump sum problem include all of the following, except
annuity payments
The variables in a future value of a lump sum problem include all of the following, except
payments
The variables in a present value of a lump sum problem include all of the following, excep
payments
The variables in a present value of an annuity problem include all of the following, except
risk profile
The variables in a present value of an annuity problem include all of the following, except:
source of funds
The variable that you are solving for in a present value of an annuity problem is
the present value