Practice Time Value Problems-GRADED A
Practice Time Value Problems
Please try to do the practice problems before checking answers the end.
21. Gerold invested $6,200 in an account that pays 5 percent simple interest. How much money
will he have at the end of ten years?
A. $8,710
B. $9,000
C. $9,300
D. $9,678
E. $10,099
Work: $6,200+ ($6,200 x 0.05 x 10) = $9,300
22. Alex invested $10,500 in an account that pays 6 percent simple interest. How much money
will he have at the end of four years?
A. $12,650
B. $12,967
C. $13,020
D. $13,256
E. $13,500
Work: $10,500 + (10,500 x .06 x 4) = $13,020
,Practice Time Value Problems-GRADED A
23. You invested $1,650 in an account that pays 5 percent simple interest. How much more
could you have earned over a 20-year period if the interest had compounded annually?
A. $849.22
B. $930.11
C. $982.19
D. $1,021.15
E. $1,077.94
Work: $1,650 + ($1,400 x .05 x 20) = $3,050
Annual Compounding: $1,650 x
24. Travis invested $9,250 in an account that pays 6 percent simple interest. How much
more could he have earned over a 7-year period if the interest had compounded annually?
A. $741.41
B. $773.58
C. $802.16
D. $833.33
E. $858.09
25. What is the future value of $7,189 invested for 23 years at 9.25 percent
compounded annually?
A. $22,483.60
B. $27,890.87
C. $38,991.07
D. $51,009.13
E. $54,999.88
26. Today, you earn a salary of $36,000. What will be your annual salary twelve years from
now if you earn annual raises of 3.6 percent?
A. $55,032.54
B. $57,414.06
C. $58,235.24
D. $59,122.08
E. $59,360.45
27. You own a classic automobile that is currently valued at $147,900. If the value increases by
6.5 percent annually, how much will the automobile be worth ten years from now?
A. $244,035.00
B. $251,008.17
C. $270,013.38
D. $277,628.63
E. $291,480.18
, Practice Time Value Problems-GRADED A
28. You hope to buy your dream car four years from now. Today, that car costs $82,500. You
expect the price to increase by an average of 4.8 percent per year over the next four years. How
much will your dream car cost by the time you are ready to buy it?
A. $98,340.00
B. $98,666.67
C. $99,517.41
D. $99,818.02
E. $100,023.16
29. This morning, TL Trucking invested $80,000 to help fund a company expansion project
planned for 4 years from now. How much additional money will the firm have 4 years from
now if it can earn 5 percent rather than 4 percent on its savings?
A. $2,940.09
B. $3,651.82
C. $4,008.17
D. $4,219.68
E. $4,711.08
Practice Time Value Problems
Please try to do the practice problems before checking answers the end.
21. Gerold invested $6,200 in an account that pays 5 percent simple interest. How much money
will he have at the end of ten years?
A. $8,710
B. $9,000
C. $9,300
D. $9,678
E. $10,099
Work: $6,200+ ($6,200 x 0.05 x 10) = $9,300
22. Alex invested $10,500 in an account that pays 6 percent simple interest. How much money
will he have at the end of four years?
A. $12,650
B. $12,967
C. $13,020
D. $13,256
E. $13,500
Work: $10,500 + (10,500 x .06 x 4) = $13,020
,Practice Time Value Problems-GRADED A
23. You invested $1,650 in an account that pays 5 percent simple interest. How much more
could you have earned over a 20-year period if the interest had compounded annually?
A. $849.22
B. $930.11
C. $982.19
D. $1,021.15
E. $1,077.94
Work: $1,650 + ($1,400 x .05 x 20) = $3,050
Annual Compounding: $1,650 x
24. Travis invested $9,250 in an account that pays 6 percent simple interest. How much
more could he have earned over a 7-year period if the interest had compounded annually?
A. $741.41
B. $773.58
C. $802.16
D. $833.33
E. $858.09
25. What is the future value of $7,189 invested for 23 years at 9.25 percent
compounded annually?
A. $22,483.60
B. $27,890.87
C. $38,991.07
D. $51,009.13
E. $54,999.88
26. Today, you earn a salary of $36,000. What will be your annual salary twelve years from
now if you earn annual raises of 3.6 percent?
A. $55,032.54
B. $57,414.06
C. $58,235.24
D. $59,122.08
E. $59,360.45
27. You own a classic automobile that is currently valued at $147,900. If the value increases by
6.5 percent annually, how much will the automobile be worth ten years from now?
A. $244,035.00
B. $251,008.17
C. $270,013.38
D. $277,628.63
E. $291,480.18
, Practice Time Value Problems-GRADED A
28. You hope to buy your dream car four years from now. Today, that car costs $82,500. You
expect the price to increase by an average of 4.8 percent per year over the next four years. How
much will your dream car cost by the time you are ready to buy it?
A. $98,340.00
B. $98,666.67
C. $99,517.41
D. $99,818.02
E. $100,023.16
29. This morning, TL Trucking invested $80,000 to help fund a company expansion project
planned for 4 years from now. How much additional money will the firm have 4 years from
now if it can earn 5 percent rather than 4 percent on its savings?
A. $2,940.09
B. $3,651.82
C. $4,008.17
D. $4,219.68
E. $4,711.08
