Question

17. A 19-year annuity pays $1,300 per month, and payments are made at the end of each month. The interest rate is 7 percent compounded monthly for the first Six years and 5 percent compounded monthly thereafter. Required: What is the present value of the annuity?

Multiple Choice $177,689.68

$225,152.39

$170,721.46

$2,090,466.81

$174,205.57

18. Your job pays you only once a year for all the work you did over the previous 12 months. Today, December 31, you just received your salary of $45,000 and you plan to spend all of it. However, you want to start saving for retirement beginning next year. You have decided that one year from today you will begin depositing 2 percent of your annual salary in an account that will earn 12 percent per year. Your salary will increase at 6 percent per year throughout your career. How much money will you have on the date of your retirement 41 years from today?

Multiple Choice

$1,483,696.00

$1,454,022.00

$1,399,713.00

$14,237.00

$4,689,769.00

24. You are considering an annuity which costs $91,563 today. The annuity pays $6,300 a year at an annual interest rate of 5.5 percent. What is the length of the annuity time period?

Multiple Choice

31.00 years

20.06 years

39.84 years

28.90 years

30.00 years

Answer 1

Q17 ANswer: $1,74,205.57

Q18 ANswer: $1,483,696.00

Q19 ANswer: 30.00 years