Question

A) Suppose payments were made at the end of each quarter into an ordinary annuity earning...

A) Suppose payments were made at the end of each quarter into an ordinary annuity earning interest at the rate of 10% per year compounded quarterly. If the future value of the annuity after 5 years is $50,000, what was the size of each payment?

B) The Pirerras are planning to go to Europe 3 years from now and have agreed to set aside $150/month for their trip. If they deposit this money at the end of each month into a savings account paying interest at the rate of 2%/year compounded monthly, how much money will be in their travel fund at the end of the third year? (Round your answer to the nearest cent.)

Business   Accounting   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

Answer:

A)

Future Value = $ 50,000

Rate of Interest = 10 % = r = 0.10

n = 4

t = 5 Years

Therefore, Payment = $ 1,957.36

B)

PMT = $ 150

Rate of Interest = 2 % = r = 0.02

n = 12 (Compounded Monthly)

t = 3 Years

Therefore, A = $ 5,670

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
The Pirerras are planning to go to Europe 4 years from now and have agreed to...
The Pirerras are planning to go to Europe 4 years from now and have agreed to set aside $170/month for their trip. If they deposit this money at the end of each month into a savings account paying interest at the rate of 2%/year compounded monthly, how much money will be in their travel fund at the end of the fourth year? (Round your answer to the nearest cent.) $
An annuity pays $20,000 per quarter for 25 years and the payments are made at the...
An annuity pays $20,000 per quarter for 25 years and the payments are made at the end of each quarter. The first payment is made at the end of the first quarter. If the annual interest rate is 8 percent compounded quarterly for the first 10 years, and 12 percent compounded quarterly thereafter, what is the present value of the annuity (i.e, value of the annuity now)?
In the following ordinary annuity, the interest is compounded with each payment, and the payment is...
In the following ordinary annuity, the interest is compounded with each payment, and the payment is made at the end of the compounding period. Find the required payment for the sinking fund. (Round your answer to the nearest cent.) Monthly deposits earning 4% to accumulate $9000 after 10 years.
Leanne Simon made ordinary annuity payments of $91.00 per month for fourteen years earning 8% compounded...
Leanne Simon made ordinary annuity payments of $91.00 per month for fourteen years earning 8% compounded monthly. How much interest is included in the future value of the annuity?
If Jackson deposits $50 at the end of each month in a savings account earning interest...
If Jackson deposits $50 at the end of each month in a savings account earning interest at a rate of 3%/year compounded monthly, how much will he have on deposit in his savings account at the end of 3 years, assuming he makes no withdrawals during that period? (Round your answer to the nearest cent.)
a) Find the future value of an ordinary annuity of $4,000 paid quarterly for 9 years,...
a) Find the future value of an ordinary annuity of $4,000 paid quarterly for 9 years, if the interest rate is 8%, compounded quarterly. (Round your answer to the nearest cent.) $ = b) Patty Stacey deposits $1600 at the end of each of 5 years in an IRA. If she leaves the money that has accumulated in the IRA account for 25 additional years, how much is in her account at the end of the 30-year period? Assume an...
Stacey Beland invests $300 at the end of each quarter in an annuity that pays 10%...
Stacey Beland invests $300 at the end of each quarter in an annuity that pays 10% interest per year, compounded quarterly. Find the amount of the annuity after 10 years. SHOW ALL WORK!
An annuity has end of quarter payments for twelve years, and the payment at the end...
An annuity has end of quarter payments for twelve years, and the payment at the end of the jth quarter (j = 1, 2, · · · , 48) is $100j. The payments are made directly into a savings account with a nominal interest rate of 4% payable quarterly, and they are left in the account. Compute the balance in the savings account immediately after the last payment. Show working please, should not be done in excel. THANK YOU.
A.)How much do you need to invest semiannually into an ordinary annuity earning an annual interest...
A.)How much do you need to invest semiannually into an ordinary annuity earning an annual interest rate of 7.12% compounded semiannually so that you will have $5,953.19 after 7 years? B.) If you make quarterly deposits of $309.00 into an ordinary annuity earning an annual interest rate of 5.74%, how much will be in the account after 15 years? How much interest did you earn in those 15 years?
In the following ordinary annuity, the interest is compounded with each payment, and the payment is...
In the following ordinary annuity, the interest is compounded with each payment, and the payment is made at the end of the compounding period. The Oseola McCarty Scholarship Fund at the University of Southern Mississippi was established by a $150,000 gift from an 87-year-old woman who had dropped out of sixth grade and worked for most of her life as a washerwoman. How much would she have had to save each week in a bank account earning 3.8% compounded weekly...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT