1) An insurance company offers you an annuity of $36,000 per year for the next 15 years. They claim your return on the annuity is 13%. What should you be willing to pay today for the annuity?

2)A financial instrument that agrees to pay an equal amount of money per period into the indefinite future (i.e. forever) is

a)perpetuity.

b)annuity.

c)annuity due.

d)sinking fund.

3)You invest $100 every monthly. The annual rate is 3% and you will invest for 20 years. How much money will you have in 20 year?