Reference no: EM13847881
1) You purchased an immediate annuity which pays you $3,000 each year from next year for 15 years. Assuming interest rate is 5%, how much is the equivalent present value of these payments?
2) Which of the following statements is correct?
a. At the same 4% annual interest rate, the future value of $1,000 in 5 years is higher than the future value of $1,000 in 6 years.
b. Future value is the equivalent amount you receive today for an amount you are going to receive at some future period.
c. At 4% annual interest rate, the present value of $1,000 you expect to receive 5 years from now is $1,000.
d. Present value is the equivalent amount you receive today for an amount you are going to receive at some future period.
3) The future value of $1,000 saved for 20 years at 5% interest is:
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