What Is the Future Value of a 5-Year Ordinary Annuity

question 12

Multiple Choice

What is the future value of a 5-year ordinary annuity with annual payments of $250,evaluated at a 15 percent interest rate?

• A) $670.44
• B) $838.04
• C) $1,250
• D) $1,685.60

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Definitions:

Variable Costs

Expenses that change in proportion to the activity of a business, such as the cost of raw materials or production volume.

Total Revenue

The amount of money generated from sales of goods or services before any expenses are subtracted.

Variable Costs

Costs that change in proportion to the level of production or sales activities of a business.

Fixed Costs

Business expenses that remain constant regardless of the level of goods or services produced.