Question

You can purchase an annuity that pays $1000 per year for 5 years. The first payment will be received exactly one year from today. If the interest rate is 8%, compounded quarterly, what is the most you would be willing to pay for the annuity (rounded to the next $)?

Question 11 options:

	1) $4,088
	2) $3,791
	3) $3,967
	4) $4,713
	5) $6,105

A quarterly compounded investment of $10,000 is expected to grow to $20,000 in 7 years. What is the underlying effective annual interest rate?

Question 8 options:

	1) 100%
	2) 10.41%
	3) 10.03%
	4) 2.60%
	5) 2.51%

Answer 1

11)