1) Calculate the average annual growth rate if an investment of $100 grows to $134.01 in 6 periods.

a) 6%

b) 4%

c) 5%

d) 7%

2) An ordinary annuity may be defined as:

a) A series of equal payments made at regular intervals that are received at the end of each period.

b) A series of payments, which may or may not be equal in value, that are received at regular intervals at the end of each period.

c) A series of equal payments made at regular intervals that are paid at the beginning of each period.

d) A series of equal payments made any time over the course of a year, extending for a period of several years.

e) Any series of payments that occur in the future.

3) Calculate the future value of a 8-year annuity due. The first annual payment of $12,000 occurs immediately. Use an interest rate of 7%.

a) $103,848

b) $131,736

c) $111,118

d) $123,736

4) Homer deposited $300 in the bank today and plans to make the same deposit next year and again the year after that. How much will Homer have in the bank in two years? Homer's bank pays an interest rate of 5.6%.

a) $951

b) $1,305

c) $651

d) $1,005

5) Sabrina deposits $400 in an account at the end of each year for 2 years. If the account pays 2% interest annually, how much money will be in Sabrina's account at the end of 2 years?