Future Value of Lumpsum MCQs

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Learning Objectives

After practice this MCQs set, you should be able to:

MCQs 1 to 20

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You invest Rs. 300,000 today at the rate of 10% per year (for the entire length of this investment of Rs. 300,000 from today to year 8). After 5 years from today you invest Rs. 200,000 more at the rate of 12% per year (for the 3 years of this investment of Rs. 200,000 from years 5 to 8). After 8 years from today all your investments are returned to you. How much will you receive after 8 years from today?

Rs. 947,853

Rs. 901,055

Rs. 969,810

Rs. 924,063

Correct! Wrong!

With continuous compounding at 10% for 30 years, the future value of an investment of Rs. 2,000 is closest to?

Rs. 45,000

Rs. 44,898

Rs. 40,171

Rs. 164,500

Correct! Wrong!

The value of money to be received in the future is _______the value of the same amount of money in hand today?

Not determined

The same as

Higher than

Lower than

Correct! Wrong!

The Future Value (FV) of Rs. 1,000 in 5 years at 5% interest rate will be?

Rs. 999.99

Rs. 1,000.00

Rs. 1,276.28

Rs. 1,500.52

Correct! Wrong!

Interest paid (earned) on only the original principal borrowed (lent) is often referred to as ______________?

Simple interest

Present value

Compound interest

Future value

Correct! Wrong!

Interest has 3 types?

Fixed rate, current rate, market rate

Fixed rate, floating rate, current rate

Market rate, combination rate, fixed rate

Fixed rate, floating rate, combination rate

Correct! Wrong!

With continuous compounding at 8 percent for 20 years, what is the approximate future value of a Rs. 20,000 initial investment?

Rs. 915,240

Rs. 99,061

Rs. 52,000

Rs. 93,219

Correct! Wrong!

If bank giving 12% interest rate per year, then per month it will be?

12%

Correct! Wrong!

Find the compound amount for the deposit, Rs. 1,900 at 10% compounded quarterly for 4 years?

2,781.79

2,820.56

2,660.00

2,097.24

Correct! Wrong!

With continuous compounding at 8 percent for 20 years, what is the approximate future value of a Rs. 20,000 initial investment?

Rs. 52,000

Rs. 915,240

Rs. 93,219

Rs. 99,061

Correct! Wrong!

What is the future value of a Rs. 10,000 college tuition fund if the nominal rate of interest is 12 percent compounded monthly for five years?

Rs. 19,133

Rs. 18,167

Rs. 18,105

Rs. 17,623

Correct! Wrong!

How much will Rs. 10,000 grow into in 5 years if you earn 10%?

Rs. 16,289

Rs. 13,102

Rs. 16,105

Rs. 8,387

Correct! Wrong!

Which of the following expresses 6.5%?

0.0065

6.50

0.650

0.0650

Correct! Wrong!

Interest paid (earned) on both the original principal borrowed (lent) and previous interest allowed (earned) is often referred to as __________?

Compound interest

Simple interest

Double interest

Present value

Correct! Wrong!

The concept of compound interest refers to?

The process of converting future lump sums and annuities into present values at a stated interest rate

The process of gradually retiring a debt through periodic payments of principal and interest

The process of servicing a debt with regular interest payments, followed lump sum payment of principal and interest at the end of the loan term

The process of earning interest on an original amount, plus interest on interest previously earned

Correct! Wrong!

You just purchased a piece of land for Rs. 10,000. If you expect a 12% annual rate of return on your investment, how much will you sell the land for in 10 years?

Rs. 38,720

Rs. 25,000

Rs. 34,310

Rs. 31,058

Correct! Wrong!

You invest Rs. 100,000 today at the rate of 8% per year. After 5 years you deposit Rs. 150,000 more. After 7 years all your investments are returned to you. How much will you receive after 7 years?

Rs. 397,348

Rs. 451,259

Rs. 250,000

Rs. 346,342

Correct! Wrong!

You invest Rs. 500,000 today at the rate of 8% per year. After 6 years from today you withdraw Rs. 300,000. After 10 years from today you receive the remaining owed. How much will you receive after 10 years from today?

Rs. 628,721

Rs. 591,289

Rs. 671,316

Rs. 602,437

Correct! Wrong!

As a borrower, you should prefer the bank that ____________________ compound per year?

More times

Interest

Less times

None of given options

Correct! Wrong!

You deposit Rs. 45,000 into an account at 4% interest compounded quarterly, how much would you have in 5 years?

Rs. 55, 687

Rs. 54,909

Rs. 57,908

Rs. 50,602

Correct! Wrong!

Future Value of Lumpsum MCQs

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Future Value of Lumpsum MCQs

Learning Objectives

MCQs 1 to 20

With continuous compounding at 10% for 30 years, the future value of an investment of Rs. 2,000 is closest to?

The value of money to be received in the future is _______the value of the same amount of money in hand today?

The Future Value (FV) of Rs. 1,000 in 5 years at 5% interest rate will be?

Interest paid (earned) on only the original principal borrowed (lent) is often referred to as ______________?

Interest has 3 types?

With continuous compounding at 8 percent for 20 years, what is the approximate future value of a Rs. 20,000 initial investment?

If bank giving 12% interest rate per year, then per month it will be?

Find the compound amount for the deposit, Rs. 1,900 at 10% compounded quarterly for 4 years?

With continuous compounding at 8 percent for 20 years, what is the approximate future value of a Rs. 20,000 initial investment?

What is the future value of a Rs. 10,000 college tuition fund if the nominal rate of interest is 12 percent compounded monthly for five years?

How much will Rs. 10,000 grow into in 5 years if you earn 10%?

Which of the following expresses 6.5%?

Interest paid (earned) on both the original principal borrowed (lent) and previous interest allowed (earned) is often referred to as __________?

The concept of compound interest refers to?

You just purchased a piece of land for Rs. 10,000. If you expect a 12% annual rate of return on your investment, how much will you sell the land for in 10 years?

You invest Rs. 100,000 today at the rate of 8% per year. After 5 years you deposit Rs. 150,000 more. After 7 years all your investments are returned to you. How much will you receive after 7 years?

You invest Rs. 500,000 today at the rate of 8% per year. After 6 years from today you withdraw Rs. 300,000. After 10 years from today you receive the remaining owed. How much will you receive after 10 years from today?

As a borrower, you should prefer the bank that ____________________ compound per year?

You deposit Rs. 45,000 into an account at 4% interest compounded quarterly, how much would you have in 5 years?

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