Financial Mathematics and Exponential Growth Quiz

Test your knowledge with these 16 questions on compound interest, exponential growth, annuities, and more in financial mathematics.

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What is the formula to calculate compound interest?

Principal × Rate × Time

Principal × (1 + Rate)^Time

Principal × Rate × (1 + Time)

Principal × Time / Rate

What is the rule of 72 used for in finance?

Calculating the future value of an investment

Estimating the time it takes for an investment to double

Calculating the present value of a future cash flow

Determining the internal rate of return (IRR)

If you invest $5000 in a savings account with an annual interest rate of 4%, how much will you have in 10 years?

$7,324.97

$6,741.15

$6,288.71

$5,949.87

If an investment grows by 5% annually, how many years will it take to double in value?

14.4 years

15.0 years

15.3 years

16.0 years

If an investment doubles in value every 5 years with continuous compounding, what is the annual growth rate?

20%

15%

10%

What is the doubling time of an investment with an annual interest rate of 8%?

6.25 years

8 years

10 years

12.5 years

What is the present value of $10,000 received in 5 years with an annual interest rate of 8%?

$6209.68

$6809.32

$7407.44

$8000.00

What is the effective annual rate (EAR) if the nominal rate is 6% compounded quarterly?

6.00%

6.14%

6.17%

6.25%

What is the formula for the future value of an annuity?

FV = PV × (1 + r)^n

FV = PV × e^(rt)

FV = PMT × [(1 + r)^n - 1] / r

FV = PMT × [(1 + r/n)^(nt) - 1] / (r/n)

#10

If the present value of an investment is $5000, and it is expected to grow to $8000 in 5 years, what is the annual growth rate?

10%

12%

15%

#11

What is the future value of $5000 invested for 10 years at an annual interest rate of 6% compounded monthly?

$8934.40

$8642.03

$8000.00

$7536.60

#12

Which of the following represents continuous compounding?

FV = PV × (1 + r)^n

FV = PV × e^(rt)

FV = PV × (1 + r/n)^(nt)

FV = PV × e^(nr)

#13

Which of the following formulas is used to calculate continuously compounded interest?

FV = PV × (1 + r)^n

FV = PV × e^(rt)

FV = PV × (1 + r/n)^(nt)

FV = PV × e^(nr)

#14

What is the formula to calculate the present value of an annuity?

PV = PMT × [(1 - (1 + r)^-n) / r]

PV = PMT × [(1 - e^(-rt)) / r]

PV = PMT × (1 + r)^-n

PV = PMT × e^(-rt)

#15

What is the future value of $2000 invested for 3 years at an annual interest rate of 5% compounded quarterly?

$2,360.31

$2,374.61

$2,391.48

$2,407.06

#16

What is the formula for calculating the number of periods needed to reach a future value with compound interest?

n = log(FV / PV) / log(1 + r)

n = log(FV / PV) / r

n = (FV - PV) / (PV × r)

n = (FV - PV) / log(1 + r)

Financial Mathematics and Exponential Growth Quiz

What is the formula to calculate compound interest?

What is the rule of 72 used for in finance?

If you invest $5000 in a savings account with an annual interest rate of 4%, how much will you have in 10 years?

If an investment grows by 5% annually, how many years will it take to double in value?

If an investment doubles in value every 5 years with continuous compounding, what is the annual growth rate?

What is the doubling time of an investment with an annual interest rate of 8%?

What is the present value of $10,000 received in 5 years with an annual interest rate of 8%?

What is the effective annual rate (EAR) if the nominal rate is 6% compounded quarterly?

What is the formula for the future value of an annuity?

If the present value of an investment is $5000, and it is expected to grow to $8000 in 5 years, what is the annual growth rate?

What is the future value of $5000 invested for 10 years at an annual interest rate of 6% compounded monthly?

Which of the following represents continuous compounding?

Which of the following formulas is used to calculate continuously compounded interest?

What is the formula to calculate the present value of an annuity?

What is the future value of $2000 invested for 3 years at an annual interest rate of 5% compounded quarterly?

What is the formula for calculating the number of periods needed to reach a future value with compound interest?

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