1.

a.) Which of the following series of cash flows is an annuity?

- $5,000 to be received in one year, $6,000 to be received in two years, and $4,000 to be received in three years.

- $5,000 to be received in one year, $5,000 to be received in two years, and $5,000 to be received in four years.

-Both Choices above are right

-None of the above

b.) If you won the lottery and had to choose between getting one single payout today or the series of payments over the next 19 years (same amount each year) which Time Value Money table would be the most helpful?

-Table 1 (Future value of $1)

-Table 2 (Present Value of $1)

-Table 3 (Future Value of an Annuity of $1)

-Table 4 (Present Value of an Annuity of $1)

c.) Jon plans to retire in 30 years. He will be able to invest $25,000 at the end of each year for 30 years. If he can earn 11% annually, how much will his retirement account balance be in 30 years?

1. $4,112,350

2. $3,407,688

3. $4,975,523

4. $750,000