Ch.13 Quiz

Instructions
Please read the questions carefully.

This assessment is worth 100 points.

  1. There is only one class of annuities.   (10 points)

      
      

  2. An ordinary annuity results in the deposit or payment being made at end of the period.   (10 points)

      
      

  3. The maturity value in compounding is like the value of an annuity.   (10 points)

      
      

  4. How much money we need to invest in the future to receive a stream of payments in the present is called the present value of an ordinary annuity.   (10 points)

      
      

  5. Companies that plan to retire bonds in the future could utilize sinking funds.   (10 points)

      
      

  6. Contingent annuities:   (10 points)

    a.  
    b.  
    c.  
    d.  
    e.  

  7. In an ordinary annuity the interest on a yearly investment starts building interest:   (10 points)

    a.  
    b.  
    c.  
    d.  
    e.  

  8. Annuity due can use the ordinary annuity table if one extra period is added and:   (10 points)

    a.  
    b.  
    c.  
    d.  
    e.  

  9. A sinking fund:   (10 points)

    a.  
    b.  
    c.  
    d.  
    e.  

  10. Bill Martin invests $6,000 at the end of each year for 10 years. The rate of interest Bill gets is 12 percent annually. The final value of Bill's investment at the end of the 10th year on this ordinary annuity: (Use the tables in the handbook)   (10 points)

    a.  
    b.  
    c.  
    d.  



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