# Quiz 07 Chapter 06, 2 Multiple Choice questions

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Question description

1) Given below are the future value factors for 1 at 8% for one to five periods. Interest compounded annually is 8%.

 Periods Future Value of 1 at 8% 1 1.080 2 1.166 3 1.260 4 1.360 5 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?
 \$8,000 × 1.360 × 4
 (\$8,000 × 1.080) + (\$8,000 × 1.166) + (\$8,000 × 1.260) + (\$8,000 × 1.360)
 \$8,000 × 1.080 × 4
 (\$8,000 × 1.260) + (\$8,000 × 1.166) + (\$8,000 × 1.080) + \$8,000
2) Use the following 8% interest factors.

 Present Value ofOrdinary Annuity Future Value ofOrdinary Annuity 7 periods 5.2064 8.92280 8 periods 5.7466 10.63663 9 periods 6.2469 12.48756

What will be the balance on September 1, 2020 in a fund which is accumulated by making \$20,000 annual deposits each September 1 beginning in 2013, with the last deposit being made on September 1, 2020? The fund pays interest at 8% compounded annually.
 \$212,733
 \$114,932
 \$178,458
 \$151,200

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