The Future Value of an Annuity of $1,000 Each Quarter

question 45

Multiple Choice

The future value of an annuity of $1,000 each quarter for 10 years, deposited at 12 percent compounded quarterly is

• A) $17,549
• B) $75,401
• C) $93,049
• D) $11,200

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Definitions:

Pretax Income

The amount of income earned by a business before any taxes have been deducted, reflecting the company's profitability.

Fixed Costs

Expenses that do not change in proportion to the activity of a business, such as rent, salaries, and insurance.

Pretax Income

The amount of income earned by a business before paying income taxes.

Variable Costs

Expenses that change in proportion with the level of production or business activity, such as materials and labor directly involved in manufacturing.