Ali Shah sets aside 2,000 each year for 5 years. He then withdraws the funds on an equal annual basis

Ali Shah sets aside 2,000 each year for 5 years. He then withdraws the funds on an equal annual basis for the next 4 years. If Ali wishes to determine the amount of the annuity to be withdrawn each year, he should use the following two tables in this order:

A. present value of an annuity of $1; future value of an annuity of $1
B. future value of an annuity of $1; present value of an annuity of $1
C. future value of an annuity of $1; present value of a $1
D. future value of an annuity of $1; future value of a $1

To save for her newborn son's college education, Lea Wilson will invest $1,000 at the beginning of each year for the next 18 years. The interest rate is 12 percent. What is the future value?

A. $7,690.
B. $34,931.
C. $63,440.
D. $62,440.

FV_A = A ´FV_IFA (App. C: 12%, 18 + 1 = 19 periods)
= $1,000 ´ (63.440 - 1) = $62,440

 If you were to put $1,000 in the bank at 6% interest each year for the next ten years, which table would you use to find the ending balance in your account?

A. Present value of $1
B. Future value of $1
C. Present value of an annuity of $1
D. Future value of an annuity of $1