Question: 1. Which statement best describes the type of problem given? You are an insurance company and have sold an annuity to a customer. The annuity

1. Which statement best describes the type of problem given?

You are an insurance company and have sold an annuity to a customer. The annuity pays 300 monthly payments (the same each month) starting 12 months from today. The monthly paymenst are $500 per month. If your firm earns 6.00% APR (compounded monthly), on its investments, how much does it have to invest today to just cover the cost of the annuity?

Level Annuity Funds Lump Sum

Lump Sum Funds Lump Sum

Annuity Funds Delayed Annuity

Lump Sum funds Delayed Annuity

Lump Sum Funds Ordinary Annuity

2. Which statement best describes the type of problem given?

You need $6,000 in 3 months to pay for your tuition. If your investments earn 2.00% APR (compounded monthly), how much do you have to invest today such that your investment will grow to just cover your property tax bill?

Annuity Funds Delayed Annuity

Lump Sum Funds Lump Sum

Lump Sum Funds Ordinary Annuity

Lump Sum funds Delayed Annuity

Level Annuity Funds Lump Sum

3. Which statement best describes the type of problem given?

You need $600 in 6 months for your annual liability insurance umbrella. If your investments earn 4.00% APR (compounded monthly), how much do you have to invest each month, starting next month for 4 months such that your investment will grow to just cover your insurance bill?

Lump Sum Funds Lump Sum

Level Annuity Funds Lump Sum

Lump Sum funds Delayed Annuity

Lump Sum Funds Ordinary Annuity

Annuity Funds Delayed Annuity

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