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 pays

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?

Your cable bill is $122 per month (starting next month) If your investments earn 3.00% APR (Compounded monthly), how much would you have to invest today to have your investment just cover 12 months worth of cable service.

Lump Sum Funds Ordinary Annuity

Level Annuity Funds Lump Sum

Annuity Funds Delayed Annuity

Lump Sum funds Delayed Annuity

Lump Sum Funds Lump Sum

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

Your gym membership costs $50 per month (starting next month) If your investments earn 6.00% APR (Compounded monthly), how much would you have to invest today to have your investment just cover 12 months worth of gym membership.

Lump Sum Funds Lump Sum

Level Annuity Funds Lump Sum

Annuity Funds Delayed Annuity

Lump Sum Funds Ordinary Annuity

Lump Sum funds Delayed Annuity

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