Higher discount rate increases calculated present value

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Reference no: EM132071605

1. When you were born, you received $100 which you invested at 7.5% interest, compounded annually. That investment is now worth $3,000. How many years have past?

a. 54

b. 47

c. 64

d. 58

e. 52

2. Choosing a higher discount rate increases the calculated present value.

True

False

3. One year ago, you invested $5,050. Today, your investment is worth $5,800. What rate of interest did you earn?

a. 16.0%

b. 22.1%

c. 14.9%

d. 23.5%

e. 20.0%

4. Today, you earn a salary of $75,500. What was your annual salary be five years ago if you receive annual raises of 3.6%?

a. $62,230

b. $63,441

c. $63,263

d. $58,213

e. $62,844

Reference no: EM132071605

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