Future value of ordinary annuity-amount of ordinary annuity

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Reference no: EM132073228

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

Reference no: EM132073228

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