1. Assume that you own an annuity that will pay you $33,000 per year for 13 years, with the first payment being made today. You need money today to open a new restaurant, and your uncle offers to give you $190,000 for the annuity. If you sell it, what rate of return would your uncle earn on his investment?

a. 0.46%

b. 28.67%

c. none of the answers is correct

d. 18.19%

e. 8.63%

2. (TRUE or FALSE?) The depreciation schedule provides principal, interest, and unpaid principal balance for each month.

3. Which of the following statements is correct?

a. All the answers are correct.

b. The lower the interest rate, the faster the value of an investment will grow, and the larger the amount of money that will accumulate over time.

c. The higher the interest rate, the faster the investment will grow.

d. Any number of changes that are observed over time in the physical and social sciences unfortunately do not follow a compound growth rate pattern and the future value formula cannot be used in calculating these growth rates.

e. A dollar today is worth less than a dollar received in the future.