10. More on the future value of annuities

Question #1 When payments are made at the end of each period, you will treat them as __________ . A. an ordinary annuity B. an annuity due C. a perpetuity

Question #2 You are planning to put $2,000 in the bank at the end of each year for the next eight years in hopes that you will have enough money for a new boat. If you are investing at an annual interest rate of 6%, youll have accumulated ______ at the end of eight years. A. $18,795 B. $16,070 C. $20,983 D. $15,304

Question #3 You decided to deposit your money in the bank at the beginning of the year instead of the end of the same year, but now you are making payments of $2,250 at an annual interest rate of 8%. How much money will you have available at the end of four years?

A. $15,874 B. $15,304 C. $10,950 D. $16,070