Quiz: Time value of money | Interest and debt | Finance & Capital Markets | Khan Academy

Test your understanding of the specific concepts, calculations, and examples covered in this video about time value of money, interest rates, and present/future value calculations.

Business mixed 6 Questions Video Quiz

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Q1 Beginner 1 pts

According to the video, what specific risk-free interest rate is used throughout the examples to make calculations easier? Video Reference:
"let's assume that we live in a world that if you put money in a bank, you are guaranteed 10% interes..."

Timestamp: 0:15

10% 9% 12% 15%

Q2 Intermediate 2 pts

In the video's first example, what would $100 invested today grow to after exactly 2 years at the given risk-free rate? Video Reference:
"Well, if you take that $100 after 1 year it becomes $110, then 10% of $110 is $11. You want to add $..."

Timestamp: 2:00

$120 $121 $110 $119

Q3 Advanced 3 pts

The speaker calculates that $65 received in one year has a present value of what specific amount? Video Reference:
"X is going to be equal to 65 divided by 1.1, $59.09, rounding it..."

Timestamp: 4:00

$59.09 $58.50 $60.00 $55.00

Q4 Intermediate 2 pts

According to the video, when comparing $100 now versus $109 in one year, which option is better and by how much? Video Reference:
"So, just doing that little exercise we actually see that $100 given now, put it in the bank at 10% r..."

Timestamp: 1:30

$100 now, better by $1 $109 in one year, better by $1 $100 now, better by $2 $109 in one year, better by $2

Q5 Intermediate 2 pts

True or False: According to the video, the present value calculation formula is X + 10%X = Future Value Video Reference:
"Whatever amount of money that is, times, if I grow it by 10%, that's literally, I'm taking X+10%X..."

Timestamp: 3:00

True

False

Q6 Beginner 1 pts

What three specific dollar amounts does the speaker initially present as options in the first example? Video Reference:
"I could give you $100 right now. That's option 1. I could, in one year, instead of giving you the $1..."

Timestamp: 0:45

Select all correct answers

$100 now, $109 in 1 year, $120 in 2 years $100 now, $110 in 1 year, $121 in 2 years $100 now, $108 in 1 year, $119 in 2 years $100 now, $111 in 1 year, $122 in 2 years

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Quiz: Time value of money | Interest and debt | Finance & Capital Markets | Khan Academy

According to the video, what specific risk-free interest rate is used throughout the examples to make calculations easier? Video Reference: "let's assume that we live in a world that if you put money in a bank, you are guaranteed 10% interes..." Timestamp: 0:15

In the video's first example, what would $100 invested today grow to after exactly 2 years at the given risk-free rate? Video Reference: "Well, if you take that $100 after 1 year it becomes $110, then 10% of $110 is $11. You want to add $..." Timestamp: 2:00

The speaker calculates that $65 received in one year has a present value of what specific amount? Video Reference: "X is going to be equal to 65 divided by 1.1, $59.09, rounding it..." Timestamp: 4:00

According to the video, when comparing $100 now versus $109 in one year, which option is better and by how much? Video Reference: "So, just doing that little exercise we actually see that $100 given now, put it in the bank at 10% r..." Timestamp: 1:30

True or False: According to the video, the present value calculation formula is X + 10%X = Future Value Video Reference: "Whatever amount of money that is, times, if I grow it by 10%, that's literally, I'm taking X+10%X..." Timestamp: 3:00

What three specific dollar amounts does the speaker initially present as options in the first example? Video Reference: "I could give you $100 right now. That's option 1. I could, in one year, instead of giving you the $1..." Timestamp: 0:45