Practice Quiz for CFA Level I Reading 6 – Time Value of Money
Time Value of Money Quiz 1 ( Reading 6, CFA Level I)
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Question 1 of 5
1. Question
A successful business man wants to provide scholarships for the education of intelligent but needy children. He plans to setup a fund that will be used to give out donations worth $20,000 every year in perpetuity. He will start giving these scholarships 5 years from now. He plans to deposit a lump sum today that will grow at a rate of 10% compounded semiannually. How much lump sum should he deposit today to be able to meet the requirements of the perpetuity?
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Question 2 of 5
2. Question
An investor deposits a sum of $5,000 in a savings scheme that provides an interest of 7% compounded monthly. How much will his investment grow to in 5 years?
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Question 3 of 5
3. Question
An investor made an investment of $10,000 in a fixed deposit. After 5 years, he received an amount of $15,000. Assuming semiannual compounding, what is the effective annual rate earned on the investment?
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Question 4 of 5
4. Question
An investor wants to have saved $10,000 in a period of 3 years. How much should he invest today to reach his target in 5 years when his investment account earns 9% per annum?
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Question 5 of 5
5. Question
Ken Atkins had taken a 30year mortgage of $100,000 for his home 5 years back. The interest rate on the mortgage is a fixed rate of 12% per annum. He has been paying equated monthly payments on the loan. What will be the current loan balance?
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