Annuities

You make $500 monthly payments into an annuity that earns 4% annual interest that is compounded monthly. If you are calculating how much this annuity will be worth in 10 years, which equation would you use?

• Desired Periodic Payment

• Future Value

• Sinking Funds

• Present Value

You have $750,000 in your 401(k) and want to find out if you have enough money to retire. You have estimated that you need to withdraw $6,000 quarterly for the next 20 years. Which equation will you use to answer this problem?

• Desired Periodic Payment

• Future Value

• Sinking Funds

• Present Value

Which one of the following annuities is not taxed when you take the money out of the annuity because it was already taxed.

• 403(b)

• Roth IRA

• 401(k)

• Traditional IRA

You would like to retire in 35 years with $2,000,000 but do not know how much you need to save every month. You found an annuity that gives you 5% interest that is compounded monthly. What equation will you use to answer this question?

• Desired Periodic Payment

• Future Value

• Sinking Funds

• Present Value

You are saving up for your daughters wedding which is still a few years out. You have estimated that you will need $20,000 and have found a sinking fund that offers 4% annual interest that is compounded monthly. Which equation will you use to calculate how much you must save each month to have $20,000 three years from now.

• Desired Periodic Payment

• Future Value

• You Mad Bro

• Present Value

You made monthly payments of $400 into an annuity for 12 years and the annuity has a balance of $80,730.00 Calculate the total interest on the annuity.

• $57,600

• $23,130

• $36,490

• $9,742