7. You put aside $100,000 in a trust for your family. You want the trust to pay an annual payment to your family and generations to come forever. The trust is expected to earn an 8% return annually. What annual payment can your family expect to receive?

1. $8,000

2. $6,000

3. $5,000

4. $10,000

____ 8. An annuity is ________.

1. a single lump sum payment 20 years from now

2. a series of equal payments forever

3. a series of unequal payment for a specific period of time

4. a series of equal payments for a specific period of time

____ 9. A primary rule of time value of money is _______.

1. That you can only combine money at different points in time

2. That you can only compare money at different points in time

3. That you can only combine and compare money at the same point in time

4. That you can only combine and compare money at different points in time