QUESTION

# Which of the following investments has a larger future value? A \$100 investment earning 10% per year for 5 years

Which of the following investments has a larger future value? A \$100 investment earning 10% per year for 5 years

or a \$100 investment earning 5% per year for 10 years. Money is compounded annually

The second investment

The first investment

The yield is identical

Only the present value can be estimated

Both investments are examples of annuities

If 8% is compounded quarterly for 3 years then the interest rate (r) for a single period used in a time-value money calculation would be

2%

None of the other alternatives are correct

4%

3%

8%

Your grand-mother puts \$1,000 per year in a TD Bank account for you. She started doing this ten years ago to save for a big graduation trip after completion of high school and before starting university. Money is worth 10%. How much is sitting in the TD bank account as of now? Please round to the nearest whole number.

\$25,937

\$15,937

\$38,550

\$6,147

\$10,000