Examination for Certified Property Tax Appraisers Seeking Training Credit

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1. The Future Worth of $1 factor is used to:
   • a) Discount a single present amount to its future value.
   • b) Compound a single present amount to its future value.
   • c) Compound a series of equal periodic payments to its future value.
   • d) Discount a series of equal periodic payments to its future amount.
2. The Present Worth of $1 factor:
   • a) Is used to discount a single future amount to its present value.
   • b) Demonstrates the premise that money in the future is always worth less than the same amount of money today.
   • c) Is the reciprocal of the Future Worth of $1 factor.
   • d) All of the above.
3. The Present Worth of $1 Per Period factor is used to:
   • a) Discount a series of future equal periodic payments to its present value.
   • b) Compound a series of equal periodic payments to its future value.
   • c) Compound a series of future equal periodic payments to its present value.
   • d) Discount a single future amount to its present value.
4. The Present Worth of $1 Per Period and Present Worth of $1 factors are the basis of yield capitalization (discounted cash flow analysis).
   • a) True
   • b) False
5. The Sinking Fund Factor is used to determine the amount of money that must be set aside each period in order to meet a future monetary obligation.
   • a) True
   • b) False
6. The Periodic Repayment factor is used to:
   • a) Determine the required periodic payment to a retire a debt over n periods at periodic rate i.
   • b) Compound a series of equal periodic payments to its future value after n periods at periodic rate i.
   • c) Determine the amount that must be deposited today to accumulate a desired future amount after n periods at periodic rate i.
   • d) Determine the periodic payment that must be made over n periods at periodic rate i to accumulate to a desired future amount.
7. Find the Present Worth of $1 factor at an annual interest rate of 7.00% for 10 years, assuming annual compounding.
   • a) 0.943495
   • b) 7.023582
   • c) 0.508349
   • d) 9.686513
8. Find the Present Worth of $1 Per Period factor at an annual interest rate of 7.00% for 10 years, assuming annual compounding.
   • a) 0.943495
   • b) 7.023582
   • c) 0.508349
   • d) 9.686513
9. You have $450,000 to invest. If you can earn an annual interest rate of 7.00%, how much would you accumulate in 10 years, assuming annual compounding?
   • a) $25,415
   • b) $885,218
   • c) $765,000
   • d) $722,610
10. You plan to invest $2,000 in an Individual Retirement Account at the end of each year for the next 5 years. If the IRA earns an annual interest rate of 4.00%, how much will you have at the end of the 5 years, assuming annual compounding?
    • a) $10,000
    • b) $10,833
    • c) $10,500
    • d) $8,904
11. You borrow $50,000 today and will repay the loan with equal monthly payments for 2 years at an annual interest rate of 12.00%. What is the monthly payment amount?
    • a) $2,083
    • b) $29,584
    • c) $2,354
    • d) $2,333
12. You invest $8,000 today at an annual rate of 6.00%, assuming monthly compounding. How much will you have after 3 years?
    • a) $9,528
    • b) $9,573
    • c) $11,348
    • d) $9,440
13. You expect 4 payments of $3,000 at the end of each of the next 4 years. At an annual interest rate of 6.00%, assuming annual compounding, what is the present value of the expected future payments?
    • a) $10,395
    • b) $13,124
    • c) $11,500
    • d) None of the above
14. How much should you deposit today in order to have $10,000 in 5 years? Assume an annual interest rate of 5.50%, with monthly compounding.
    • a) $7,651.34
    • b) $7,600.50
    • c) $8,072.17
    • d) $7,252.46
15. You expect to receive payments of $15,000 at the end of each year for the next 10 years. Assuming an annual interest rate of 4.00%, with annual compounding, how much would that stream of payments be worth today?
    • a) $121,663
    • b) $126,530
    • c) $180,092
    • d) $66,777
16. You expect to replace the roof of your investment property in 15 years at an estimated cost of $800,000. If you can earn an annual interest rate of 4.00%, how much should you deposit at the end of each year in order to fund the roof replacement?
    • a) $39,953
    • b) $55,467
    • c) $51,282
    • d) $3,251
17. How much would you have to deposit now in order to have $15,000 in 8 years, given an annual interest rate of 7.00%, with annual compounding?
    • a) $8,730
    • b) $9,341
    • c) $8,752
    • d) $13,950
18. Someone promises to pay you $25,000 five years hence. If the annual interest rate is 6.00%, assuming annual compounding, how much would you pay for this promise today?
    • a) $18,534
    • b) $18,681
    • c) $20,001
    • d) $19,802
19. You want to save $8,000 so that you can buy a new (used) car. If you deposit $185.71 every month, beginning in one month, in an account that pays 12.00% interest per year, with monthly compounding, how long will you be saving for your car?
    • a) 36 months
    • b) 24 months
    • c) 28 months
    • d) 38 months
20. John deposits $200 today in an account that pays an annual interest rate of 5.00%, with annual compounding. How much will John have in the account at the end of 10 years, assuming no withdrawals?
    • a) $250.00
    • b) $329.40
    • c) $325.78
    • d) $345.60
21. A property generates $15,000 at the end of each year over a 7-year period. The income is deposited into an account that pays interest of 6.00 percent, compounded annually. How much will be in the account after the 7 years?
    • a) $83,736
    • b) $125,908
    • c) $111,300
    • d) $105,000
22. In 10 years, the owner of an apartment building expects to upgrade the HVAC system at a cost of $40,000. To accumulate the funds, she plans to make monthly deposits into an account pays an annual rate of 8.00% (monthly compounding). How much does she need to deposit each month?
    • a) $120.00
    • b) $333.33
    • c) $218.64
    • d) $276.12
23. An investor acquires an income-producing property. The property's expected annual net income is $30,000 at the end of each year over an 8-year holding period. If the investor requires an annual rate of return of 5.00% (annual compounding), what is the present value of the expected future income stream (i.e., the estimated value of the property)?
    • a) $203,591
    • b) $241,200
    • c) $236,968
    • d) $193,896
24. A property owner leases an office building for ten years at $20,000 per year, with the tenant paying all expenses. The investor requires an annual rate of return 7.00% (annual compounding). What is the present value of the lease payments to the lessor?
    • a) $193,730
    • b) $140,472
    • c) $200,000
    • d) $150,304
25. A buyer must borrow $200,000 to complete the purchase of a commercial property. The interest rate on the loan is 5.00%, and the term is 30 years with monthly payments. What is the buyer's monthly payment?
    • a) $1,301
    • b) $1,074
    • c) $1,280
    • d) $1,671