12) Which of the following investments would you prefer? A) an investment earning 8.5 percent for 20 years B) an investment earning 10 percent for 20 years C) an investment earning 3 percent for 40 years D) an investment earning 5 percent for 40 years 13) Which of the following would you prefer? A) two hundred ten dollars today B) five hundred dollars to be received in 12 years when rates are 9 percent C) five hundred dollars to be received in 12 years when rates are 8 percent D) four hundred dollars to be received in nine years when rates are 8 percent 14) What would be more valuable, receiving $1,895 today or receiving $3,450 in six years if interest rates are 8 percent? A) Need more information to make a determination B) receiving $3,450 in six years C) They are worth the same amount D) receiving $1,895 today 15) Approximately what interest rate is needed to double an investment over four years? D) 18 percent A) 25 percent B) 4 percent C) 100 percent Given a 4 percent interest rate, compute the year 6 future value of deposits made in years 1, 2, 3, and 4 of $1,000, $1.200, s1.200, and $1,400. B) $5,191.68 C) $5,070.78 D) $5,484.56 A) $4,334.53 17) You started your first job after graduating from college. Your company offers a retirement plan for which the company contributes 50 percent of what you contribute each year. You expect to contribute $2,000 per year from your salary. You decide to invest the contributions in assets that you expect to earn 10 percent per year. If you plan to retire in 40 years, how big will you expect that retirement account to be? A) $1,527,787.70 C) $442,592.56 B) $885,185.11 D) $1,327,777.67 18) What is the present value of a $500 deposit in year 1, and another $100 deposit at the end of year 4 if interest rates are 5 percent? A) $558.46 B) $480.00 C) S493.62 D) $582.27 19) What is the present value, when interest rates are 6.5 percent, of a $100 payment made every year forever? A) $6.50 B) $650.00 C) $1,538.46 D) $1,000.00