3) The present value of an ordinary annuity of $350 each year for five years, assuming an opportunity cost of 4 percent, is A) $288 B) $1,896 C) $1,750 D) $1,558 4) A generous benefactor to a local ballet plans to make a one-time endowment that would provide the ballet with $150,000 per year into perpetuity. The rate of interest is expected to be 5 percent for all future time periods. How large must the endowment be? A) $ 300,000 B) $3,000,000 C) $750,000 D) $1,428,571 5) Find the future value at the end of year 3 of the following stream of cash flows received at the end of each year, assuming the firm can earn 17 percent on its investments. Year Amount $3,000 6,000 9,000 A) $20,724 B) $20,127 C) $23,550 D) $23,350 6) The rate of interest agreed upon contractually charged by a lender or promised by a borrower is the interest rate. A) effective B) nominal C) discounted D) continuous 7) The future value of an annuity of $1,000 each quarter for 10 years, deposited at 12 percent compounded quarterly is A) $17,549 B) $75,401 C) $93,049 D) $11,200 8) Gina has planned to start her college education four years from now. To pay for her college education, she has decided to save $1,000 a quarter for the next four years in a bank account paying 12 percent interest. How much will she have at the end of the fourth year? A) $ 1,574 B) $19,116 C) $20,157 D) $16,000