Test Bank For Personal Finance 6th Edition Madura

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