You are going to pay $100 into an account at the end of each of the next 40 years. At the beginning of the 41st year, you buy a 30-year annuity whose first payment comes at the end of the 41st year (both accounts pay 12%). How much money will be in the account at the end of year 40 (round to the nearest $1.00?

a $85,914

b $76,709

c $44,800

d $93,000

If the future value of annuity A is greater than the future value of annuity B, then the present value of annuity A must also be greater than the present value of annuity B, when all else is equal. It is assumed that the interest rate is positive and the amounts of A and the amount of B are not zero.

a True

b False

c This question cannot be answered without knowing the dollar amount the investment.

d This question cannot be answered without knowing the exact value of the interest rate.