Annuities

Mathematics of Finance
Present and Future Value of Annuities

by Elo Cheng

Multiple Choice

Ordinary annuity is paid or received at the _______ of the time periods.

• beginning

• end

• middle

• quarter

Multiple Choice

It is a series of equal payments at regular intervals.

• Interest

• Annuity

• Logic

• Proposition

Multiple Choice

Sam wins an annuity that pays P5,000 at the end of every six months for 6 years. What is the present value of this annuity if the money is worth 10% per annum continuous compounding?

• P30,000

• P134,231.67

• P32,150.66

• None of the above

Multiple Choice

Kailee saves $500 at the end of each quarter in an ordinary annuity earning 6.2% interest compounded quarterly. How much will Kailee have saved in 20 years?

• Future value = 78,058.07

• Future value = 78,158.07

• Future value = 87,258.07

• Future value = 38,158.07

Multiple Choice

Kiersten deposits $200 in an ordinary annuity at the end of each month in an account that earns 7% interest compounded monthly. What is the future value of Kiersten's annuity in 40 years?

• Future value = 524,962.68

• Future value = 425,962.68

• Futur value = 544,962.68

• Future value = 96000

Multiple Choice

Ordinary annuity is paid or received at the _______ of the time periods.

• beginning

• end

• middle

• quarter

Multiple Choice

A machine is purchased by making payments of $8,000 at the beginning of each of the next five years. The interest rate was 10%. What was the cost of the machine (rounded to the nearest whole number)?

• $53,725

• $48,841

• $33,359

• $30,326

Multiple Choice

An annuity makes 25 annual payments of  ₱1,000 with the first payment coming today. What is the future value of this as of 25 years from now if the interest rate is 9%?

• $30,647.60

• $30,674.60

• $92,323.98

• $92,323.97