2. You have $800 that you would like to invest. You have 2 choices: Savings account A which earns 8% compounded annually, or savings account B which earns 7.90% compounded semiannually. Which would you choose and why?

A because it has a higher effective annual rate.

A because it has the higher quoted rate.

B because it has a higher effective annual rate.

B because the future value in one year is lower.

B because it has the higher quoted rate.

4. What is the total future value six years from now of $80 received in one year, $300 received in two years, and $700 received in six years if the discount rate is 7%?

< >1,080.00 < >1,047.15 < >1,205.44 < >,254.44 < >1,299.15

7. You are going to withdraw $5,000 at the end of each year for the next four years from an account that pays interest at a rate of 9% compounded annually. How much must there be in the account today in order for the account to reduce to a balance of zero after the last withdrawal?

< >14,793.83 < >8.60 < >18,602.29 < >19,713.75 < >20,000.00

< >n the problem in #7 how much interest will you eam over the four year period?

$ 0.00

< >,409.60 < >3,801.40 < >,000.00 < >5,711.20

9. At the end of each year for the next 8 years you will receive cash flows of $500. The initial investment is initial investment is $2,500. What rate of retum are you expecting from this investment?

< >% < >27% < >01% < >.28% < >21%

< >ou are considering investing $400 in a 12-year annuity. The rate of retum you require is 9%. What annual cash flow from the annuity will provide the required retum?

$ 10.77

$ 42.96

$ 55.86

$ 78.31

E) $129.2