1.D 2.E 3.E 4.C

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1. What annual compounding rate of interest do you need to earn for $2000 to grow to S10.00Qin 35 years? A. 3.4% B. 3.6% C. 4.0% D. 4.4% Version 1-4 2. An insurance policy will pay you or your heirs $5000 a year for 40 years. If the first payment is received 15 years from today and the discount rate is 5%, what is the total value of the policy today? A. $41,269 B. S42,189 C. S43,333 D. $43,546 E. S43,836 3. An investment will pay you $500 per year forever with the first payment received 10 years from today. If you use a 10% rate to evaluate investments, how much would you pay for the investment today? A. S1928 B. S2084 C. S2120 D. $2166 E. S2268 4. You are planning to retire in 30 years and are planning a 20 year retirement. Prior to retirement, you will save S1400 at the end of each year. If your investments can earn 10% per year over the entire time, how much can you withdraw at the end of each year during retirement? A.$26,425 $ 26,759 C. 27,050 D. 27,241 E. S27,982