1 Devi invests $4,000 at 2 75 compounded quarterly The effective annual inflation rate i 1 00 What is the effective annual real rate rreal (Give your answer to 3 decimal places Write 3 456 as 3 456 not 0 03456 ) 2 Muhammad invest $12,000 in a GIC paying 2 25 effective annual interest Muhammad computes his real (inflation adjusted) rate of return r real 0 491 What is the effective annual inflation rate i 3 For each of the following annuities, find the best matching description Cesar settles a lawsuit and will receive 16 monthly payments of $1,000 Contingent annuity, Annuity immediate, Annuity certain, Annuity due Anish pays $1200 at the end of every month for child support Contingent annuity, Annuity immediate, Annuity certain, Annuity due Every week from April 1 to October 31 a farmer receives a payment of $100 if there was no rain that week Contingent annuity, Annuity immediate, Annuity certain, Annuity due Qiang receives a housing allowance of $750 at the beginning of every month to help pay rent Contingent annuity, Annuity immediate, Annuity certain, Annuity due 4 Biyu plans to make deposits of $950 00 at the start of every week for 6 years (312 payments) At the end of 6 years, Biyu will have $X The interest rate is r (52) 2 75 a None of the other answers is correct b X is the present value of an annuity due and X $273,316 25 c X is the future value of an annuity due and X $322,333 25 d X is the present value of an annuity immediate and X $273,171 79 e X is the future value of an annuity immediate and X $322,162 87 5 Biyu is buying a car by making monthly payments of $350 00 (at the start of every month) for 7 years (84 payments) This payment plan is equivalent to paying $X in cash for the car The interest rate is r (12) 1 75 a None of the other answers is correct b X is the future value of an annuity immediate and X $31,252 38 c X is the future value of an annuity due and X $31,297 96 d X is the present value of an annuity due and X $27,691 96 e X is the present value of an annuity immediate and X $27,651 63

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Question: 1. Devi invests $4,000 at 2.75% compounded quarterly. The effective annual inflation rate i = 1.00%. What is the effective annual real rate rreal? (Give

1. Devi invests $4,000 at 2.75% compounded quarterly. The effective annual inflation rate i = 1.00%. What is the effective annual real rate rreal? (Give your answer to 3 decimal places. Write 3.456% as 3.456 not 0.03456.)

2. Muhammad invest $12,000 in a GIC paying 2.25% effective annual interest. Muhammad computes his real (inflation adjusted) rate of return r_real = 0.491%. What is the effective annual inflation rate i?

3. For each of the following annuities, find the best matching description.

Cesar settles a lawsuit and will receive 16 monthly payments of $1,000.	Contingent annuity, Annuity immediate, Annuity certain, Annuity due
Anish pays $1200 at the end of every month for child support.	Contingent annuity, Annuity immediate, Annuity certain, Annuity due
Every week from April 1 to October 31 a farmer receives a payment of $100 if there was no rain that week.	Contingent annuity, Annuity immediate, Annuity certain, Annuity due
Qiang receives a housing allowance of $750 at the beginning of every month to help pay rent.	Contingent annuity, Annuity immediate, Annuity certain, Annuity due

Biyu plans to make deposits of $950.00 at the start of every week for 6 years (312 payments). At the end of 6 years, Biyu will have $X. The interest rate is r⁽⁵²⁾ = 2.75%.

None of the other answers is correct.

X is the present value of an annuity due and X = $273,316.25.

X is the future value of an annuity due and X = $322,333.25.

X is the present value of an annuity immediate and X = $273,171.79.

X is the future value of an annuity immediate and X = $322,162.87.

Biyu is buying a car by making monthly payments of $350.00 (at the start of every month) for 7 years (84 payments). This payment plan is equivalent to paying $X in cash for the car. The interest rate is r⁽¹²⁾ = 1.75%.

None of the other answers is correct.

X is the future value of an annuity immediate and X = $31,252.38.

X is the future value of an annuity due and X = $31,297.96.

X is the present value of an annuity due and X = $27,691.96.

X is the present value of an annuity immediate and X = $27,651.63.

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