Find the Amount of an Annuity If $300 Per Month

question 135

Multiple Choice

Find the amount of an annuity if $300 per month is paid into it for a period of 17 years, earning interest at the rate of 9% per year compounded continuously.

• A) $144,727
• B) $118,909
• C) $245,790
• D) $179,614
• E) $179,511

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Definitions:

Market Rate

The prevailing interest rate available in the open market, often influencing or benchmarking loan and savings rates.

Contract Rate

Contract rate refers to the agreed-upon price or interest rate specified within a contract, often related to loans or financial agreements.

Premium

The additional cost above the normal or nominal amount, usually associated with insurance premiums, bond market pricing, or superior products and services.

Contra Liability Account

An account on a company's balance sheet that decreases the balance of a liability account to reflect its net value.