Compound Interest and Annuity

Mariam plans to have $350,000 in a retirement fund 30 years from now. What monthly ordinary annuity payment should she make if the investment she has selected earns 7.2% annual interest?

• $ 3129

• $871.29

• $ 275.76

• $2757.59

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Fahad earned $475 from mowing lawns last summer. He deposited this money in an account that pays an interest rate of 3.8% compounded annually. What will be his balance after 15 year?

• $827.52

• $ 831.10

• $839.45

• $ 846. 80

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Yousif deposits RM 100 every end of month for 6 years into an account that earns 5% interest. How much interest will he earn?

• RM 1,176.43

• RM 7,200.00

• RM 8,376.43

• RM 2,235.56

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Reem purchased an ordinary annuity 5 years ago. The annuity pays 8% compound interest. The quarterly payments have been $ 500. What is the total value of the annuity to date?

• $ 12,148.68

• $ 2,602.02

• $ 8175.72

• $ 2,933.30

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Nabaa saves $500 at the end of each quarter in an ordinary annuity earning 6.2% interest compounded per annum. How much will Nabaa have saved in 20 years?

• $ 78,158.07

• $ 22833.87

• $ 983999.4

• $ 18793.17

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The concept of compound interest is most appropriately described as:

• Interest earned on an investment

• The total amount of interest earned over the life of an investment

• Interest earned on interest

• None of the above

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Fatima took out a loan for $195,000 to renovate her ancestral home. At 4.3% interest rate compounded annually, how much will she have paid in total after 30 years?

• $689,546.99

• $529.305.61

• $412,749.79

• $640,891.53

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How do we know we are looking at an Annuity question versus just a compound interest question?

• a number has changed by a certain percentage

• Interest is compounded "n" times per year

• the periodic rate is the annual interest rate

• You are making regular payments instead of a lump sum deposit

Malak deposits $2,000 yearly into a retirement account (ordinary annuity). The account pays 7% interest compounded annually. How much money will be in the account after 25 years?

• $126,498.08

• $78,268.97

• $42,160.07

• $124,498.10

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Abdulla is investing $5,000 quarterly for 2 years at 6% interest in an annuity. How much money is in the account at maturity?

• $42,164.20

• $42,270.20

• $52,164.20

• $42,284.89

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