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Economics

1) You purchased an immediate annuity which pays you $3,000 each year from next year for 15 years. Assuming interest rate is 5%, how much is the equivalent present value of these payments?

2) Which of the following statements is correct?

a. At the same 4% annual interest rate, the future value of $1,000 in 5 years is higher than the future value of $1,000 in 6 years.

b. Future value is the equivalent amount you receive today for an amount you are going to receive at some future period.

c. At 4% annual interest rate, the present value of $1,000 you expect to receive 5 years from now is $1,000.

d. Present value is the equivalent amount you receive today for an amount you are going to receive at some future period.

3) The future value of $1,000 saved for 20 years at 5% interest is:

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Business Economics, Economics

Category:- Business Economics
Reference No.:- M91422425

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