1 .		When is payment made on an ordinary annuity?    beginning of the period   middle of the period   during the first three days of the period   end of the period
2 .		Mary plans to set aside $460 every six months in an annuity. The annuity will earn 4 percent per year over the next six years. The rate per period of interest is 2 percent, and using 12 periods, the ordinary annunity table gives a factor of 13.412. What will the cash value of the annuity be at the end of six years?    $5,522.76   $110.04   $6,169.52   $6,911.96
3 .		What is the main difference between an annuity and a compound interest investment?    A series of payments is made for annuities.   Compound interest investments are for a shorter time period.   The cash value of annuities can be figured using the compound interest table.   Annuities involve a series of payments of usually differing amounts whereas, compound investments involve regular contributions of equal amounts.
4 .		When are payments made in an annuity due?    end of the period   middle of the period   beginning of the period   three times during each period
5 .		What type of amount are you finding in a sinking fund problem?    the future amount   the maturity value   accumulated value at the end of the first 7 periods   the periodic payment
6 .		What is the current value of the future amount called?    future value   principal   present value   past value
7 .		What kind of an account do companies sometimes establish when they make plans to replace used equipment?    annuity   sinking fund   trust   "slush" fund
8 .		Find the future value of a quarterly annuity of $2,000 at 8% for 4 years compounded quarterly. Use the compound interest table.    $2,000   $2,745.57   $2,981.31   $2,498.73
9 .		Bob Mackay purchased an ordinary annuity 4.5 years ago that has semiannual payments of $300 and pays 4 percent interest compounded semiannually. What is the value of Mr. Mackay's account at the present time if no other deposits or withdrawals have been made? Use table 11-1 in your text.    $2,926.50   $408.00   $354.00   $300.00
10 .		An ordinary annuity was purchased 5 years ago. The annuity pays 8% compounded quarterly. The quarterly payments have been $500. What is the amount of interest earned on the annuity to date? Use table 11-1 in your text.    $2,148.50   $1,551.78   $2,867.25   $1,561.83
11 .		Which piece of information is not necessary to compute the payment amount in a sinking fund?    purpose of the fund   future amount desired   interest rate   frequency of compounding