Luis Villanueva Chapter 5

1.      The process of calculating the present value of a future cash flow is known as compounding?

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2.      The IRR stands for internal rate of return.

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3.      A Mortgagee is a real estate borrower

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4.      A NPV considers both cash inflows and outflows.

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5.      The process of calculating the future value of a present cash flow is known as compounding?

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6.      A person takes a Mortgage loan for 136,000 the interest rate is 4.9%. It is a 30 year fixed loan what are the monthly payments?(round to nearest dollar)

a)      700.00

b)      600.00

c)      848.00

d)     736.00

7.      If the same loan from question 6 is one lump sum payment yearly then what is the yearly payment?

a)      8,000.00

b)      10,000.00

c)      9,590.00

d)     8,930.00

8.      A specific type of income stream characterized by equal periodic payments over its life is known as:

a)      An annuity

b)      Compounding

c)      Discounting

d)     Net Present Value

1)F 2)T 3)F 4)T 5)T 6)d 7)d 8) a