This afternoon, you deposited $1,000 into a retirement savings account. The account will compound interest at 6 percent annually

This afternoon, you deposited $1,000 into a retirement savings account. The account will compound interest at 6 percent annually. You will not withdraw any principal or interest until you retire in forty years. Which one of the following statements is correct?    A.  The interest you earn six years from now will equal the interest you earn ten years from now. B.  The interest amount you earn will double in value every year. C.  The total amount of interest you will earn will equal $1,000 × .06 × 40. D.  The present value of this investment is equal to $1,000. E.  The future value of this amount is equal to $1,000 × (1 + 40).06.

14.

Your grandmother has promised to give you $5,000 when you graduate from college. She is expecting you to graduate two years from now. What happens to the present value of this gift if you delay your graduation by one year and graduate three years from now?    A.  remains constant B.  increases C.  decreases D.  becomes negative E.  cannot be determined from the information provided

15.

Luis is going to receive $20,000 six years from now. Soo Lee is going to receive $20,000 nine years from now. Which one of the following statements is correct if both Luis and Soo Lee apply a 7 percent discount rate to these amounts?    A.  The present values of Luis and Soo Lee's monies are equal. B.  In future dollars, Soo Lee's money is worth more than Luis' money. C.  In today's dollars, Luis' money is worth more than Soo Lee's. D.  Twenty years from now, the value of Luis' money will be equal to the value of Soo Lee's money. E.  Soo Lee's money is worth more than Luis' money given the 7 percent discount rate.

16.	Which one of the following variables is the exponent in the present value formula?    A.  present value. B.  future value. C.  interest rate. D.  time. E.  There is no exponent in the present value formula.