Multiple choice

1. If the present value annuity factor at 8% APR for 10 years is 6.71, what is the equivalent future value annuity factor?  

a. 3.108 

b. 14.487 

c. 2.159 

d. None of the above 

2. You are considering investing in a retirement fund that requires you to deposit $5,000 per year, and you want to know how much the fund will be worth when you retire. What 

financial technique should you use to calculate this value?  

a. Future value of a single payment 

b. Future value of an annuity 

c. Present value of an annuity 

d. None of the above 

3. Mr. Hopper is expected to retire in 25 years and he wishes accumulate $750,000 in his 

retirement fund by that time. If the interest rate is 10% per year, how much should Mr. 

Hopper put into the retirement fund each year in order to achieve this goal? [Assume that the payments are made at the end of each year]  

a. $4,559.44 

b. $2,500 

c. $7,626.05 

d. None of the above 

4. Mr. Hopper is expected to retire in 30 years and he wishes accumulate $1,000,000 in his retirement fund by that time. If the interest rate is 12% per year, how much should Mr. Hopper put into the retirement fund each year in order to achieve this goal?  

a. $4,143.66 

b. $8,287.32 

c. $4,000 

d. None of the above