Use the Following Information in Solving the Following Question(s)

question 40

Multiple Choice

Use the following information in solving the following question(s) .
You are going to pay $100 into an account at the beginning of each of the next 40 years.At the beginning of the 41st year,you buy a 30-year annuity whose first payment comes at the end of the 41st year (the account pays 12%) .
-How much will you receive at the end of the 41st year (i.e. ,the first annuity payment) ? Round to the nearest $100.

• A)$93,000
• B)$7,800
• C)$11,400
• D)$10,700

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Definitions:

Payee

The person or entity to whom a payment is directed or made, typically referred to in financial transactions.

Commercial Paper

Unsecured promissory notes with a fixed maturity of usually less than 270 days, used extensively in the financing of business operations.

UCC

The Uniform Commercial Code, a comprehensive set of laws governing commercial transactions in the United States, including sales, leases, negotiable instruments, and secured transactions.

Confession of Judgment

An agreement where a debtor allows a creditor to obtain a judgment against them without a trial.