Answer Happy

Test 2 Annuities: FV, PV, Pmt from FV & PV K-A [20 marks] Multiple Choice Identify the choice that best completes the statement or answers the question. 1. Wilson makes monthly payments of $180 into an account that pays 4% per year, compounded monthly. How much money will be in his account in 3 years? a. $6873.00 c. $12 181.24 b. $6872.68 d. $76 517.94 2. Marco makes monthly payments of S75 into an account that pays 3.5% per year, compounded monthly. How much money will be in his account in 10 years? a. $10 757.44 c. $10 558.25 b. $10 480.61 d. $11 160.98 3. Mohammed invested $6500 annually into a mutual fund that averaged 12% net growth per year with interest compounded annually. How much was his investment worth after 4 years? a. $31 065.63 C. $27 193.58 b. $26 471.75 d. $34 892.00 4. Ingrid invested $375 per month in a mutual fund that averaged 10.5% net growth per year with interest compounded monthly. How much was her investment worth after 6 years? a. $38 003.88 c. $37 391.67 b. $37 391.68 d. $27 856.10 5. A scholarship of $1500 will be awarded to one eligible high school student on each of the following 20 years. If the money can be invested at 10% per year, compounded annually, how much money is needed today to create the scholarship fund? a. $27 528.03 c. $18 693.32 b. $12 770.35 d. $23 383.74 6. An electronics retailer offers a payment plan at 4.5% annual interest, compounded monthly. Customers can pay for a home theatre system by monthly payments of $247.56 for 2 years. What is the cost of the home- theatre system for a customer paying cash at the time of purchase? a. $6024.58 c. $5617.67 b. $5671.76 d. $6204.85 7. A furniture retailer offers a payment plan at 9.5% annual interest, compounded monthly. Customers can pay for a living room set by monthly payments of $316.45 for 16 months. What is the cost of the furniture for a customer paying cash at the time of purchase? a $4731.35 c. $5029.29 b. $4816.52 d. $4738.08