$10,000 is used to purchase an appropriate size annuity that has level annual payments for 18 years. The price of the annuity is based on an effective annual rate of 11.2%. As each payment is received, it is put into a fund that earns an effective annual rate of 7%. (a) Determine the accumulated value of the investment at the end of 18 years. (b) If the $10,000 were put into a fund that was to produce the same final value after 18 years, what annual effective rate would that fund have to offer?

A fund is built with annual payments increasing by $1 from $1 to $10 and then decreasing by $1 to $0. The first payment of $1 is made today. If the fund is used to purchase a ten-year level annuity with the first payment at twenty years from today, what is the amount of the level payment? (Assume an annual effective rate of interest of 4%.) Possible Answers A B D <$16 c≥ $17 but < $18 E ≥ $16 but < $17 ≥ $18 but < $19 ≥ $19

A student will receive a $25,000 grant at the beginning of every year for the next five years. Assuming an annual interest rate of 4% is appropriate, the present value of an ordinary annuity is 4.4518 x $25,000 = $111,295, and the present value of an annuity due is 4.6299 x $25,000 = $115,748. What is the fair value of the grant payments according to the Financial Accounting Standards Board (FASB)? $130,000 $115,748 $125,000 $111,295

Bright Inc. will be receiving $5,500 at the end of every month for the next 2 years. If these payments were directly invested into a fund earning 6.00% compounded semi-annually, what would be the future value of the fund at the end of 2 years? Round to the nearest cent