A Single Amount Is Invested and Increases Over Time as Interest

question 96

Multiple Choice

A single amount is invested and increases over time as interest is compounded. If the number of periods is known, the interest rate can be approximately determined by ________.

• A) dividing the present value by the future value and looking for the quotient in the future value of $1 table
• B) multiplying the present value by the future value and looking for the product in the present value of $1 table
• C) dividing the future value by the present value and looking for the quotient in the future value of $1 table
• D) dividing the future value by the present value and looking for the quotient in the present value of $1 table

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Definitions:

Return On Investment

A performance measure used to evaluate the efficiency or profitability of an investment, calculated by dividing the benefit of an investment by its cost.

Sales Margin

The difference between the selling price of a product or service and its cost, expressed as a percentage of sales.

Capital Turnover

A ratio that measures the efficiency of a company's use of its capital in generating revenue.

Invested Capital

The total amount of money put into a company by its owners and creditors for use in the business operations, often used as a metric in financial analysis.