Test Bank For Personal Finance 6th Edition Madura
Personal Finance, 6e (Madura)
Chapter 3 Applying Time Value Concepts
3.1 The Importance of the Time Value of Money
1) The time period over which you save money has very little impact on its growth.
Answer: FALSE
Diff: 1
Question Status: Previous edition
2) The time value of money concept can help you determine how much money you need to save over a period of time to achieve a specific savings goal.
Answer: TRUE
Diff: 1
Question Status: Previous edition
3) Time value of money calculations, such as present and future value amounts, can be applied to many day-to-day decisions.
Answer: TRUE
Diff: 1
Question Status: Revised
4) Time value of money is only applied to single dollar amounts.
Answer: FALSE
Diff: 1
Question Status: Previous edition
5) Your utility bill, which varies each month, is an example of an annuity.
Answer: FALSE
Diff: 1
Question Status: Previous edition
6) In general, a dollar can typically buy more today than it can in one year.
Answer: TRUE
Diff: 1
Question Status: Revised
7) An annuity is a stream of equal payments that are received or paid at equal intervals in time.
Answer: TRUE
Diff: 1
Question Status: Previous edition
8) An annuity is a stream of equal payments that are received or paid at random periods of time.
Answer: FALSE
Diff: 2
Question Status: Previous edition
9) Time value of money computations relate to the future value of lump-sum cash flows only.
Answer: FALSE
Diff: 2
Question Status: Revised
10) There are two sets of present and future value tables: one set for lump sums and one set for annuities.
Answer: TRUE
Diff: 1
Question Status: Previous edition
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