Practice Example Of Present Value Calculation (1.7.1) - Construction Methods and Equipment Management

Practice: Example of Present Value Calculation

Lesson 1.7.1Construction Methods and Equipment Management

Practise this section

10 questions

Flashcard drill
4 cards from this section. Quick, good the night before a test.
Exercise
6 questions · about 4 min · pass mark 70%. Hints available.
Sign up to start the exercise
Quiz
4 questions · about 3 min · pass mark 70%. Hints available.
Sign up to start the quiz

6 sample questions

Question 1.
What is the Time Value of Money?
Show hintHide hint
Think about inflation and interest.
Question 2.
What formula would you use to calculate future value?
Show hintHide hint
Remember the future value depends on present value and interest rate.
3Question 3.
What does the Time Value of Money refer to?
- Money is always worth the same
- Money available now is worth more than in the future
- Money loses value over time
Show hintHide hint
Think about interest and inflation.
4Question 4.
True or False: The future value of money can be calculated by F = P(1+i)^n.
- True
- False
Show hintHide hint
Remember the formula structure.
Question 5.
A contractor wants to buy a new piece of equipment for ₹1,00,000 five years from now. If the interest rate is 6%, how much should he save now?
Show hintHide hint
This is done by calculating how much ₹1,00,000 is worth today.
Question 6.
A company needs to accumulate ₹50,00,000 in 10 years for a building purchase. What should the annual deposit be if the interest rate is 7%?
Show hintHide hint
Remember the compounding effect on regular deposits.

6 more questions in this section. Enroll free to practise them all.