PV of Ordinary AnnuityPVA = PMT × [1−1/(1+r)ⁿ] ÷ r
Annuity DueMultiply ordinary annuity × (1+r)
Perpetuity & EAR
Perpetuity PVPV = PMT ÷ r
Effective Annual RateEAR = (1 + r_nom/m)ᵐ − 1
Continuous CompoundingFV = PV × e^(r×n)
Loan Amortization
Monthly PaymentUse PVA formula, r = annual÷12, n×12
Interest PortionBeg. Balance × periodic rate
Principal PortionPMT − Interest Portion
—
out of 100 points
—
Section 1
—/40
Multiple Choice
Section 2
—/20
True / False
Section 3
—/20
Short Answer
Section 4
—/20
Extended Response
⚠ Sections 3 & 4 are teacher-graded. Use the rubric selectors below to finalize the score.
1
Multiple Choice
Select the best answer — many questions require TVM calculations
2 pts each · 40 pts
Click the best answer. Use the formula reference panel above for calculation questions. Round to the nearest whole dollar or nearest tenth of a percent unless otherwise stated. Each question is worth 2 points.
2
True or False
Click TRUE or FALSE for each statement
2 pts each · 20 pts
Select TRUE or FALSE for each statement. Each is worth 2 points.
3
Short Answer
Show all calculations + explain in 2–4 sentences · Teacher-graded
5 pts each · 20 pts
Answer in 2–4 complete sentences. Show every step of your calculations clearly. Rubric selectors appear after grading.
4
Extended Response — Community Wealth Planning Memo
Multi-part TVM scenario · Show all work · Teacher-graded
20 pts
Read the scenario carefully. Write a well-organized response of at least 8 sentences. Show all calculations with labeled steps. Use and underline at least four unit vocabulary terms.
📋 Scenario — The Swanson Initiative Youth Savings Program
BBYM's Swanson Initiative is launching a youth savings and wealth-building program. Three young people from the Birmingham-Bessemer community have each come to the program with different financial goals. As the program's financial advisor, you must use TVM principles to help each person make their decision.
Participant A — Kezia (Savings Goal)
Invests $2,000 today at 6% annual, compounded monthly. Wants to know FV in 10 years.
Participant B — Marcus (Retirement)
Will deposit $200/month for 30 years at 7% annual rate. Wants projected balance.
Participant C — Destiny (Home Loan)
Borrows $120,000 at 6% annual (monthly payments) for 30 years. Needs monthly payment and total interest paid.
Key Comparison
What would Kezia have if she waited 5 years to start instead? Quantify the cost of waiting.
35
Complete all four parts in your response: (a) Calculate Kezia's FV after 10 years at 6% compounded monthly — show work; (b) Calculate Marcus's projected retirement balance using the FV of an ordinary annuity — show work; (c) Calculate Destiny's monthly mortgage payment and total interest paid over 30 years — show work; (d) Calculate what Kezia would have if she waited 5 years (investing $2,000 at year 5, growing for only 5 years), and explain in 2–3 sentences what the TVM principle of opportunity cost of waiting means for young savers. Use at least four underlined unit vocabulary terms throughout your response.
📋 Teacher Scoring Rubric
Criterion
Excellent (Full)
Proficient (Partial)
Developing (Minimal)
Score
Part (a) — Kezia's FV FV = $2,000×(1+0.06/12)^120 ≈ $3,638
Correct answer with r=0.5%/mo, n=120 shown
Correct formula, minor arithmetic error
Wrong formula or no work shown
/4
Part (b) — Marcus's FVA FVA = $200×[(1.00583)^360−1]/0.00583 ≈ $243,994
Correct annuity formula with monthly rate and 360 periods shown
Correct setup, arithmetic off by <5%
Annual rate used without converting, or wrong formula
/5
Part (c) — Destiny's Mortgage PMT ≈ $719.46/mo · Total interest ≈ $139,006
Payment correct; total interest = (PMT×360)−$120,000 shown
Payment correct but total interest missing or wrong
Incorrect payment formula or setup
/5
Part (d) — Cost of Waiting + TVM Insight FV(5yr wait) = $2,000×(1.005)^60 ≈ $2,696 · Lost ≈ $942
Correct "wait" FV calculated; clear explanation of opportunity cost of waiting using TVM vocabulary
Calculation correct but explanation vague, or vice versa
Neither calculation nor explanation adequate
/6
Extended Response Total: — / 20
Ready to Grade?
Sections 1 & 2 auto-grade instantly. Use the rubric for Sections 3 & 4.