1. What is the present value of a $2,000 per year ordinary annuity at a discount rate of 5% for 10 years?

A. $1,228

B. $15,443

C. $25,156

D. None of the above

2. You will receive a $100,000 inheritance in 20 years. Your investments earn 6% per year, compounded annually. To the nearest hundred dollars, what is the present value of your inheritance?

A. $8,700

B. $29,800

C. $31,200

D. $35,500

E. $5,000

3. What is the present value of a $2000 per year annuity at a discount rate of 15% for 15 years?

A. $8,137

B. $11,695

C. $17,028

D. None of the above

4. If the business manager deposits $200 in a savings account at the end of each year for twenty years what will be the value of her investment:

a) at a compounded rate of 10%?

b) at a compounded rate of 20%?

5. As the CFO of a home health agency, you need to determine the present value of a $5,000 investment received at the end of year ten, if the discount rate were:

a) 5%?

b) 10%?

c) 15%?

d) 20%?

6. If a hospital were to receive $4,000 per year in payments at the end of each year for the next 12 years from an uninsured patient who underwent an expensive operation, what would be the current value of these collection payments:

a) at a 4% rate of return?

b) at a 14% rate of return?

7. Management has studied work patterns in the housekeeping department and estimates the number of hours to be worked as follows. Hours worked = (1,500 hours per month) + (0.50