Points:/1 Summer20IS ACCT301-21 Quiz3 Name: unt that must be invested now to pro

Question

Points:/1 Summer20IS ACCT301-21 Quiz3 Name: unt that must be invested now to prodce a known future value C) D) All of these answer choices are correet Always smaller than the future value 2. Ifan annaity due and an ondinary annuity have the same number of equal payments and the same intcrest rates, then A) the present value of the annuity due is less than the present value of the ordinary annuity the present value of the annuity due is greater than the present value of the ordinary B) annuity C) the future valuae of the annuity due is equal to the future value of the ordinary the future value of the annuity due is less than the future value of the ordinary annuity D) 3. Ifyou invest SS0000 to earn 8% interest, which of the following compounding approaches would return the highest amount after one year? A) Daily. B) Monthly. C) Quarterly. D) Annually Use the following to answer questions 4-6: Given below are the future value factors for l at 896 for one to five periods. Each of the question(s) is based on 8% interest compounded annually. Periods Future Value of L at 8% 1.080 1.166 1.260 1.360 1.469 What amount will be in a bank account three years from now if $8,000 is invested each year for four years with the first investment to be made today? A) ($8,000 x 1.260)+ ($8,000 x 1.166)+($8,000x 1.080)+$8,000 B) $8,000 x 1.360 x 4 C) ($8,000 x 1.080) + (S8,000 x 1.166) + (S8,000 x 1.260) + ($8,000 x 1.360) 4. D) $8,000× 1.080×4 Page 1

Explanation / Answer

question 1:

All options are correct

Question 2:

Option B- is correct

Question 3:

Daily compounding results in highest interest. More the number of compounding periods, more is the interest

Question 4:

Option -A is correct

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