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

More times

None of given options

Less times

Interest

Correct! Wrong!

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

Rs. 57,908

Rs. 55, 687

Rs. 50,602

Rs. 54,909

Correct! Wrong!

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

Double interest

Compound interest

Simple interest

Present value

Correct! Wrong!

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

Rs. 16,105

Rs. 13,102

Rs. 16,289

Rs. 8,387

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. 591,289

Rs. 602,437

Rs. 628,721

Rs. 671,316

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. 93,219

Rs. 915,240

Rs. 52,000

Rs. 99,061

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?

2,660.00

2,781.79

2,820.56

2,097.24

Correct! Wrong!

Interest has 3 types?

Market rate, combination rate, fixed rate

Fixed rate, floating rate, combination rate

Fixed rate, floating rate, current rate

Fixed rate, current rate, market rate

Correct! Wrong!

Which of the following expresses 6.5%?

0.0065

6.50

0.0650

0.650

Correct! Wrong!

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. 969,810

Rs. 947,853

Rs. 901,055

Rs. 924,063

Correct! Wrong!

The concept of compound interest refers to?

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

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

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. 1,500.52

Rs. 1,276.28

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. 99,061

Rs. 93,219

Rs. 52,000

Rs. 915,240

Correct! Wrong!

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

Rs. 164,500

Rs. 40,171

Rs. 45,000

Rs. 44,898

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. 31,058

Rs. 38,720

Rs. 34,310

Rs. 25,000

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. 250,000

Rs. 451,259

Rs. 397,348

Rs. 346,342

Correct! Wrong!

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

Lower than

Higher than

The same as

Not determined

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. 17,623

Rs. 18,105

Rs. 18,167

Correct! Wrong!

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

Simple interest

Future value

Present value

Compound interest

Correct! Wrong!

Future Value of Lumpsum MCQs

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Future Value of Lumpsum MCQs

Learning Objectives

MCQs 1 to 20

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?

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

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

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?

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?

Interest has 3 types?

Which of the following expresses 6.5%?

The concept of compound interest refers to?

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

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

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

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

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?

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

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