Alternate Quiz - Section 3-3 (Form A) - Future Value of an Annuity; Sinking Funds

Multiple-choice exercise

Work out the problem on paper and then choose the letter for your answer. After you have successfully answered all questions, look at the top of the page to see how you did.

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$300 is deposited at the end of each month into an ordinary annuity. If the account pays 3.2% compounded monthly, how much will be in the account after 10 years?

$42360.90

$42473.87

$3036.26

$412.96

$401,334.69

None of the answers given; click to see the solution.

You make annual payments of $1000 into an ordinary annuity paying 5% compounded annually. How much interest will the account earn in 4 years?

$310.13

$4310.13

$1215.51

$200

None of the answers given; click to see the solution.

A company establishes a sinking fund in order to buy a piece of business equipment which will cost $50,000 in 3 years. The company will deposit money quarterly into an ordinary annuity paying 4.2% compounded quarterly. How much must they deposit each quarter into the account?

$3931.49

$16492.89

$44109.71

None of the answers given; click to see the solution.

You can afford monthly payments of $300 into an ordinary annuity account that pays 2.8% compounded monthly. How long will it be until the account contains $10,000? (Round to the next-higher month if not exact.)

33 months

1505 months

24 months

32 months

None of the answers given; click to see the solution.

A person makes annual payments of $2000 into an ordinary annuity account. At the end of 4 years, the amount in the account is $8417.33. What annual nominal compounding rate has this annuity earned?

3.4%

43.23%

40.9%

None of the answers given; click to see the solution.