If you invest $10,000 at 10% interest, how much will you have in 10 years?

Under what conditions must a distinction be made between money to be received today and money to be received in the future?

A. A period of recession.
B. When idle money can earn a positive return.
C. When there is no risk of nonpayment in the future.
D. When current interest rates are different from expected future rates.

As the compounding rate becomes lower and lower, the future value of inflows approaches

A. 0
B. the present value of the inflows
C. infinity
D. need more information

If you invest $10,000 at 10% interest, how much will you have in 10 years?

A. $13,860
B. $25,940
C. $3,860
D. $80,712

FV = PV x FV_IF (App. A: 10%, 10 years)
= $10,000 x 2.594 = $25,940

 In determining the future value of a single amount, one measures
A. the future value of periodic payments at a given interest rate.
B. the present value of an amount discounted at a given interest rate.
C. the future value of an amount allowed to grow at a given interest rate.
D. the present value of periodic payments at a given interest rate.

The concept of time value of money is important to financial decision making because

A. it emphasizes earning a return on invested capital.
B. it recognizes that earning a return makes $1 worth more today than $1 received in the future.
C. it can be applied to future cash flows in order to compare different streams of income.
D. all of these