15) An annuity pays $10 per year for 98 years. What is rate is 7%? y pays $10 per year for 98 years. What is the present value (PV) of this annuity given that the discount A) $85.60 B) $171.20 C) $142.67 D) $199.74 16) If the current rate of interest is 8%, then the present value (PV) of an investment that pays $1200 per year and fasts 24 years is closest to A) $7581 B) $15,162 C) $12,635 D) $17.689 17) You are borrowing money to buy a car. If you can make payments of S320 per month starting one month from now at an interest rate of 12%, how much will you be able to borrow for the car today if you finance the amount over 4 years? A) 87291.00 B) $14,582.00 C) $17,012.34 D) $12,151.67 18) Which of the following statements regarding annuities is FALSE? A) PV of an annuity Cx (1+r) B) The difference between an annuity and a perpetuity is that a perpetuity ends after some fixed number of payments. C) An annuity is a stream of N equal cash flows paid at regular intervals. D) Most car loans, mortgages, and some bonds are annuities. 19) Clarissa wants to fund a growing perpetuity that will pay $10,000 per year to a local museum, starting next year. She wants the annual amount paid to the museum to grow by 5% per year. Given that the interest rate is much does she need to fund this perpetuity? A) S125,000.00 B) $200,000.00 C) $300,000.00 D) $250,000.00 201 A rich donor gives a hospital $1,040,000 one year from today. Each year after that, the hospital will receive a et 6 payment 6% large larger than the previous payment, with the last payment occurring in ten years' time. What is the present value (PV) of this donation, given that the interest rate is 1967 A) $3,840.628.87 B) $5,376.880.42 C) $6,913,131.97 D) $7,681,257.74 21) Suppose that a young couple has just had their first baby and they wish to ensure that enough money will be available to pay for their child's college education. Currently, college tuition, books, fees, and other costs average $12,000 per year. On average, tuition and other costs have historically increased at a rate of 5% per year Assuming that college costs continue to increase an average of 5% per year and that all her college savings are invested in an account paying 8% interest, then the amount of money she will need to have available at age 18 to pay for all four years of her undergraduate education is closest to A) $110,793 B) $55,397 C) $77,555 D) $132,952