Future Value of an Annuity

1) Suppose that you want to create a "college fund" for your newborn child and place $300 in a bank account at the end of each of the next 20 years. If that account earns an annual rate of return of 7%, how much will be in that account at the end of the twentieth year?

A) $13,420.00

B) $12,977.53

C) $13,178.20

D) $11,828.32

E) $12,298.65

2) Suppose that you had deposited $125 in a bank account for each of the last 5 years. What annual interest rate is attached to this account if there is now (at the end of the fifth year) $758.92 in the account?

A) 8%

B) 10%

C) 12%

D) 14%

E) 16%

3) You have a financial goal of putting a $10,0000 down payment on a home in 5 years. How much would you need to save each year if you could earn 8% annually?

A) $1,423.44

B) $1,704.56

C) $1,990.50

D) $2,200.23