1. (Future value of an ordinary annuity) If you can earn at an annual interest rate of 8% per year, how much will you have accumulated if you save $3,000 at the end of each of the next:
a. 5 years
b. 10 years
c. 15 years
d. 20 years
2. (Amount of an ordinary annuity) How much must you pay at the end of each year to repay a $50,000, 14% annual interest rate loan if you must make:
a. 10 payments
b. 15 payments
c. 20 payments
d. 30 payments
3. (Present value of an ordinary annuity) You wish to create a bank account from which you can withdraw $10,000 per year at the end of each of the next 10 years. How much must you deposit today to provide these benefits if you can earn at a rate of:
a. 5%
b. 12%
c. 16%
d. 20%
4. (Present value of an ordinary annuity) You wish to create a bank account from which you can withdraw $10,000 per year at the end of each of the next 10 years. How much must you deposit today to provide these benefits if you can earn at a rate of:
a. 5%
b. 12%
c. 16%
d. 20%
5. (Length of an ordinary annuity) You have saved $250,000 and wish to retire today. For how many years can you draw $30,000, at the end of each year, if you can continue to earn interest at a rate of:
a. 5%
b. 8%
c. 10%
d. 11%
6. (Interest rate in an ordinary annuity) An insurance fund advertises that if you invest $50,000 today, you will receive a fixed amount at the end of each of the next 20 years. What interest rate are they giving you if the annual amount is:
a. $ 3,500
b. $ 5,000
c. $ 7,500
d. $10,000