Practice Time Value of Money - 24 | 24. Time Value of Money | Management 1 (Organizational Behaviour/Finance & Accounting)
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24 - Time Value of Money

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Learning

Practice Questions

Test your understanding with targeted questions related to the topic.

Question 1

Easy

What is the formula for simple interest?

💡 Hint: Remember, it only uses the principal!

Question 2

Easy

Name the three main reasons that explain TVM.

💡 Hint: Think about factors that affect purchasing power.

Practice 4 more questions and get performance evaluation

Interactive Quizzes

Engage in quick quizzes to reinforce what you've learned and check your comprehension.

Question 1

What does the Time Value of Money (TVM) refer to?

  • Money in the future will be worth more than today
  • Money today is worth more than in the future
  • Both statements are true

💡 Hint: Consider how money can grow with time.

Question 2

True or False: Present value is the current worth of a future sum of money.

  • True
  • False

💡 Hint: Think about the definition of present value.

Solve 3 more questions and get performance evaluation

Challenge Problems

Push your limits with challenges.

Question 1

A company is considering a project with an upfront cost of ₹500,000 and expects to receive cash inflows of ₹120,000 annually for 7 years. If the required return is 10%, calculate the NPV of the project.

💡 Hint: Use the NPV formula involving discounting cash flows.

Question 2

You decide to set aside ₹2,000 each year for 10 years in an account that earns 4% interest compounded annually. Calculate the future value of this annuity at the end of 10 years.

💡 Hint: This involves the future value of an ordinary annuity formula.

Challenge and get performance evaluation