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Question: 1. Assume you are the recipient of


1. Assume you are the recipient of a two-year, 5 percent, $100 per year ordinary annuity. What is the present value of the amount to be received at the end of the first year?
a. $105
b. $100
c. $95 (rounded)
d. $90 (rounded)

2. Assume you are the recipient of a two-year, 5 percent, $100 per year ordinary annuity. What is the present value of the annuity?
a. $205
b. $200
c. $186 (rounded)
d. $174 (rounded)

3. Assume you are the recipient of a two-year, 5 percent, $100 per year annuity. If this is an annuity due instead of an ordinary annuity, what would be the present value of the first receipt?
a. $100
b. $95 (rounded)
c. $186 (rounded)
d. $200


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