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In an ordinary annuity the interest on a yearly investment starts building interest:
At the beginning of the first period
 
Scott deposits $5,000 at the end of each year into an account for five years.
Assuming 6% interest annually, what is the value of his account in five years?
$28,185.50
 
Contingent annuities:
Have no fixed amount of payments
 
Ted Williams made deposits of $500 at the end of each year for eight years. The rate is 8% compounded annually.
The value of Ted's annuity at the end of eight years is (use the tables in the handbook):
$5,318.30
 
Joe Sullivan invests $9,000 at the end of each year for 20 years. The rate of interest Joe earns is 8% annually.
The final value of Joe's investment at the end of the 20th year on this ordinary annuity is (use the tables in the handbook):
$411,858.00
 
At the beginning of each year, Bill Ross invests $1,400 semiannually at 8% for nine years.
The cash value of the annuity due at the end of the ninth year is (use the tables in the handbook):
$38,739.68
$37,399.68
$37,939.86
$37,339.68
None of these (37,339.72)
 
Payments in annuities can be made:5_2018_QC_CS-116739
Monthly
Quarterly
Semiannually
Yearly
All of these
 
An annuity due can use the ordinary annuity table if one extra period is added and:
Add one payment to total value
Subtract one payment from total value
 
Ed Sloan invests $1,600 at the beginning of each year for eight years into an account that pays 10% compounded semiannually.
The value of the annuity due is (use the tables in the handbook).06_2017_QC_CS-108480
$41,344.48
$1,600.00
$38,744.48
$37,744.48
None of these
 
An annuity is:
A stream of payments 
 
Ordinary annuity payments are made:
At the end of the period
 

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At the beginning of each year for 14 years, Sherry Kardell invested $400 that earns 10% annually.
What is the future value of Sherry's account in 14 years?1_03
$12,309
 
Connie made deposits of $2,000 at the beginning of each year for four years.
The rate she earned is 5% annually. What is the value of Connie's account in four years?
$9,051.20
 
An annuity due compared with an ordinary annuity results in a:
Higher value
 
Lance Rice has decided to invest $1,200 quarterly for eight years in an ordinary annuity at 4%.
The total cash value of the annuity at end of year 8 is (use the tables in the handbook):
$44,992.92
 
Bram Johnson invests $500 at the end of each quarter for 10 years.
The account earns 12% interest annually. What is the value of the account at the end of 10 years?
$37,700.60
 
Abby Mia wants to know how much must be deposited in her local bank today,
 so that she will receive yearly payments of $18,000 for 20 years at a current rate of 9% compounded annually.
(Use the tables in the handbook.)
$164,313
 
 
The present value of an ordinary annuity:
Tells how much money one needs to invest in the future
 
Nancy Billows promised to pay her son $600 quarterly for four years.
If Nancy can invest her money at 6% in an ordinary annuity, she must invest how much today?
(Use the tables in the handbook.)
$8,478.72
 
A sinking fund:
Aids in meeting a future obligation.

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