Financial functions  Excel MCQs

  1. Which function in Excel calculates the future value of an investment based on periodic, constant payments and a constant interest rate?
    a) PV
    b) FV
    c) NPV
    d) RATE
    Answer: b) FV
  2. What does the Excel function PMT calculate?
    a) The total amount of a loan
    b) The payment for a loan based on constant payments and a constant interest rate
    c) The interest rate of a loan
    d) The present value of a series of future payments
    Answer: b) The payment for a loan based on constant payments and a constant interest rate
  3. Which function in Excel calculates the present value of an investment?
    a) PV
    b) FV
    c) PMT
    d) NPV
    Answer: a) PV
  4. What does the NPV function in Excel return?
    a) The net present value of an investment based on a series of periodic cash flows and a discount rate
    b) The future value of a series of periodic cash flows
    c) The interest rate of an investment
    d) The payment amount for a loan
    Answer: a) The net present value of an investment based on a series of periodic cash flows and a discount rate
  5. Which function would you use to calculate the internal rate of return for a series of cash flows?
    a) IRR
    b) NPV
    c) RATE
    d) XIRR
    Answer: a) IRR
  6. What does the function RATE calculate in Excel?
    a) The future value of an investment
    b) The interest rate per period of an annuity
    c) The net present value of an investment
    d) The total amount of payments for a loan
    Answer: b) The interest rate per period of an annuity
  7. Which function would you use to calculate the cumulative interest paid on a loan between two periods?
    a) IPMT
    b) PPMT
    c) CUMIPMT
    d) CUMPRINC
    Answer: c) CUMIPMT
  8. What does the function XNPV return in Excel?
    a) The net present value for a schedule of cash flows that is not necessarily periodic
    b) The internal rate of return for a series of cash flows
    c) The future value of a series of periodic cash flows
    d) The total amount of payments for a loan
    Answer: a) The net present value for a schedule of cash flows that is not necessarily periodic
  9. Which function in Excel calculates the principal part of a payment for a given period for an investment?
    a) PMT
    b) IPMT
    c) PPMT
    d) NPV
    Answer: c) PPMT
  10. What does the function CUMPRINC return in Excel?
    a) The cumulative principal paid on a loan between two periods
    b) The cumulative interest paid on a loan between two periods
    c) The net present value of an investment
    d) The future value of an investment
    Answer: a) The cumulative principal paid on a loan between two period

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