Start learning →

MBA Finance Time Value of Money — practice questions

Explore 30 free Time Value of Money questions in MBA Finance Financial Management. Open each question or exercise to read its content, reference answers and available explanation.

Practise Time Value of Money with Quill →

Time Value of Money questions and exercises with answers

Showing questions 1–30 of 30.

The idea that money available now is worth more than the same amount later is the:Read the answer and worked solution →A friend puts 1,000 in an account paying 4% a year. After one year the balance is:Read the answer and worked solution →Leaving that same money for a second year at 4% gives a balance of:Read the answer and worked solution →The extra 1.60 earned in that second year is interest on:Read the answer and worked solution →Interest earned in later periods on interest already earned is called:Read the answer and worked solution →A person deposits 300 in an account paying 5% a year. After one year they have:Read the answer and worked solution →A company earning 2.50 per share sees a 10% rise the next year. New earnings per share are:Read the answer and worked solution →A shop raising a 50 rupee item by 3% next year will price it at:Read the answer and worked solution →The value a present sum grows to at a future date is called its:Read the answer and worked solution →The value today of a sum to be received later is called its:Read the answer and worked solution →The interest rate used to bring a future cash flow back to today is called the:Read the answer and worked solution →Bringing a future amount back into today's rupees is described as the exact opposite of:Read the answer and worked solution →A house listed at 400,000 today, with prices rising 4% a year for six years, needs which calculation?Read the answer and worked solution →A shortcut that estimates how long money takes to double is the:Read the answer and worked solution →Using that shortcut, savings earning 9% a year will take about how long to double?Read the answer and worked solution →Using the same shortcut at 6% a year, money doubles in about:Read the answer and worked solution →Using it at 12% a year, money doubles in about:Read the answer and worked solution →When compounding happens more often within a year, the interest income is received:Read the answer and worked solution →Because of that, 200 at a given rate compounded quarterly rather than annually will grow to:Read the answer and worked solution →A single one-time receipt or payment of cash is described as a:Read the answer and worked solution →The time value of money is linked to inflation because rising prices:Read the answer and worked solution →Someone seeking the highest interest rate available should remember that investments are usually:Read the answer and worked solution →Catch the money-over-time wordsRead the answer and worked solution →Pop the doubling timesRead the answer and worked solution →Run the value gatesRead the answer and worked solution →Slice the finance wordsRead the answer and worked solution →Forward or backwardRead the answer and worked solution →Sort the growth resultsRead the answer and worked solution →Type the numberRead the answer and worked solution →Time value bingoRead the answer and worked solution →

Worked practice questions

The idea that money available now is worth more than the same amount later is the:

  1. Time value of money
  2. Trade value of money
  3. Total value of money
  4. Term value of money
Show answer and solution

Correct answer: A. Time value of money

1. Money on hand can be invested. 2. It earns interest while it waits. 3. That is the time value of money. _Source: OpenStax Principles of Finance 2e, Chapter 7, Time Value of Money I._

Open this question →

A friend puts 1,000 in an account paying 4% a year. After one year the balance is:

  1. 1,080
  2. 1,040
  3. 1,004
  4. 1,400
Show answer and solution

Correct answer: B. 1,040

1. Four per cent of 1,000 is 40. 2. Add that to the original 1,000. 3. The balance is 1,040. _Source: OpenStax Principles of Finance 2e, Chapter 7, Time Value of Money I._

Open this question →

Leaving that same money for a second year at 4% gives a balance of:

  1. 1,081.60
  2. 1,080.00
  3. 1,084.00
  4. 1,076.00
Show answer and solution

Correct answer: A. 1,081.60

1. The second year earns on 1,040, not 1,000. 2. That gives 41.60 of interest. 3. The balance is 1,081.60. _Source: OpenStax Principles of Finance 2e, Chapter 7, Time Value of Money I._

Open this question →

How to practise

  1. Choose a Time Value of Money question and try to work out your answer.
  2. Open the question to check the correct answer and read its worked solution.
  3. Continue in the app for bite-sized lessons, explanations and review with Quill. You can start without creating an account.

More Financial Management topics

Corporate FinanceInvestment ManagementFinancial ManagementBusiness StudiesFinancial MarketsSimple and Compound InterestSecurities MarketsCapital Budgeting