1-Which of the following statements is true concerning an annuity?All else equal, an ordinary annuity is more valuable than an annuity dueAll else equal an increase in the number of annuity payments decreases the present value and increases the future value of an annuityAll else equal, an increase in the discount rate increases the present value and increases the future value of an annuityAll else equal, a decrease in the number of payments decreases the future value of an annuity due2-How many years would it take you to increase your savings by a factor of 5 if you can earn 18%, compounded semiannually?9.7218.689.34Impossible to determine3-You can invest $5,000 today and receive $12,000 in 8 years. What is the annual return on this investment?17.5%19.6%11.56%1.12%4- You are planning to purchase a car in three years and wish to have $5,000 for a down payment. You have access to an account that earns 10%, compounded monthly. How much do you need to deposit into the account today in order to reach your goal?$3,756.57$3,708.70$119.67$161.755-A 5-year annuity of $350 quarterly payments begins in 4 years (the first payment is at the end of the first quarter of year 4, so it's an ordinary annuity). The appropriate discount rate is 6%, compounded quarterly. What is the value of the annuity today?$4,735.30$6,009.02$4,945.94$4,014.476- A 12-year annuity of $225 monthly payments begins in 7 years (the first payment is at the end of the first month of year 7, so it's an ordinary annuity). The appropriate discount rate is 8%, compounded monthly. What is the value of the annuity 5 years from today?$15,109.87$17,722.18$16,363.98$20,786.137- You are planning for your retirement and have decided the following: you will retire in 35 years and will make monthly deposits into your retirement account of $300 for the next 15 years and then monthly deposits of $700 for the remaining 20 years until retirement. This account earns a 7% rate of return, compounded monthly. In addition, you will inherit $25,000 7 years from today. The inheritance will be deposited into an account that will earn 10% per year until year 20 and then 15% per year after that (compounded annually). How much will you have when you retire?$1,450,970.64$1,607,248.63$800,779.71$2,333,359.698- You are planning for your retirement and have decided the following: you will retire in 35 years and will make monthly deposits into your retirement account of $400 for the next 15 years and then monthly deposits of $800 for the remaining 20 years until retirement. This account earns a 7% rate of return, compounded monthly. In addition, you will inherit $50,000 7 years from today. The inheritance will be deposited into an account that will earn 10% per year until year 20 and then 15% per year after that (compounded annually). You expect to live 35 years past retirement and wish to make equal monthly withdrawals from your account. How much will you be able to withdraw each month if the account that holds your retirement money makes a 3% return, compounded monthly?$8,979.94$7,497.24$11,139.82$9,300.509- You wish to have $50,000 to make a down payment on a house in 7 years. You plan to make equal quarterly deposits into a savings account that will earn 9%, compounded quarterly, over the next 7 years to reach your goal. How much do you have to put into the account each month?$26,816.19$1,301.26$1,717.82$397.7510- You wish to purchase a car and can borrow at a 6% interest rate, compounded monthly. You can afford a car payment of $700 each month for the next four years. How much can you borrow?$36,207.89$10,955.02$29,806.22$29,864.4911- An investment pays $1,500 per year for 30 years beginning this year. After that, the investment pays $2,500 per year forever. The appropriate discount rate is 10%. What is the investment worth today?$39,140.37$5,592.45$15,573.09$25,000.0012- You plan to deposit $2000 each year into an account for the next 9 years. The discount rate is 12% for the next 4 years and 9% after that. What is the value today of your nine deposits of $2000 each?$4,095.02$10,886.16$13,854.00$11,018.5913- A growing perpetuity of annual cash flows begins with $1000 at the end of this year. The growth rate of the cash flows is 3.5% and the discount rate is 11%. What is the value of the perpetuity in 3 years?$18,235.08$14,782.91$13,333.33$0