Reference no: EM132859679
Questions -
Q1. What amount will Miley need to put in the bank today at 4% interest in order to have $20,000 in 5 years?
a. 16,000
b. 16,439
c. 17,439
d. 20,000
Q2. If Sabrina puts $1,000 in the bank today at 6%, what amount will she have in 3 years?
a. 1,060.00
b. 1,121.10
c. 1,191.10
d. 1,241.10
Q3. Cardi is thinking of investing in a zero-coupon bond that sells for $250. At maturity in 16 years, it will be redeemed for $1,000. What approximate annual rate of growth does this represent?
a. 8%
b. 9%
c. 12%
d. 25%
Q4. Rita desires to purchase an ordinary annuity that will pay her $4,000 a year for the next 20 years. She is expecting that the annual interest rates will be 8% over that time period. The maximum price that Rita will be willing to pay for the annuity is closest to:
a. 32,000
b. 39,273
c. 40,000
d. 80,000
Q5. Which of the following choices is considered as an annuity? Explain.
a. Niall gets $10 this year and $20 next
b. Rexha gets $10 in 3 months and $10 6 months later
c. Taylor gets $50 in 6 months and $20 6 months later
d. Nina gets $100 every year for the rest of her life
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