Exploring Savings Annuity Concepts

What is the monthly deposit amount mentioned in the problem?

• $100

• $200

• $300

• $400

What type of interest compounding is used in the account?

• Quarterly

• Annually

• Monthly

• Daily

What is the formula used to calculate the future value of an annuity?

• P = D(1 + r/n)^(nt)

• P = D(1 + r/n)^(nt) - 1 / (r/n)

• P = D(1 + r)^(nt) - 1

• P = D(1 + r/n)^(n/t) - 1 / (r/n)

What does 'r' represent in the annuity formula?

• Deposit amount

• Compounding frequency

• Interest rate

• Number of years

How many times per year is the interest compounded?

• 4

• 1

• 12

• 2

What is the value of 't' in the context of this problem?

• 30 years

• 12 years

• 20 years

• 3 years

How do you convert an annual interest rate into a decimal for calculations?

• Divide by 100

• Multiply by 100

• Multiply by 12

• Divide by 12

What does 'n' represent in the annuity formula?

• Interest rate

• Total amount

• Number of compounding periods per year

• Number of years

What is the final amount calculated in the account after 30 years?

• $116,547.38

• $200,000.00

• $100,000.00

• $150,000.00

Why is the final amount rounded to the nearest hundredth?

• Because it's a standard practice in finance

• Due to tax purposes

• None of the above

• To simplify the numbers