Question

Classify the finacial problem. Assume a 7% interest rate compounded annually. Find the value of a $ 1,000 certificate in 4 years. a) sinking fund, b) ordinary annuity, c) future value, d) present value e) amortization

Answer 1

I have seen this posted a few times and no one has answered it. I know it is not amortization because that deals with reducing an amount of money like a mortgage. It is not present value because we are looking for an amount of money in the future.

It could be future value, but I am not sure because you aren't making monthly payments. It actually might be an ordinary annuity.