Question

1. For the next 6 years, you pan to make equal quarterly deposits of $600.00 into an account paying 8% compounded quarterly. How much will be the total you have at the end of the time?

2. How much money will you have to deposit now if you wish to have $5,000 at the end of 8 years. Interest is to be at the rate of 6% compounded semiannually?

3. In the California “Million Dollar Lottery” a winner is paid the million dollars at the rate of $50,000 semiannually for 10 years. Assume that th ese payments form an annuity, and that the lottery manager can invest money at 8% compounded semiannually. Find the sum that the Lottery Commission must invest now to pay off the “Million Dollar” winner. Also, find the amount of interest involved.

4. You o we $6800 to your mother. You have agreed to make monthly payments over the next 5 years at 8% compounded monthly. After 2 years of payments, you have decided to pay your mother the remaining balance. What was the initial payment and what was the remaini ng balance after 2 years of payments?

5. In 6 years you wish to have a sinking fund of $18,000. How much will you have to deposit each quarter if interest is 12% compounded quarterly?

6. How much should be deposited now at 10% compounded semiannually to make possible withdrawals of $3,000 every 6 months for the next 10 years? Also, what will the total interest be? 7. If you deposit $1,600 into an account paying interest at 8% compounded continuously, how much will be in your account at the end of 12 years?

8. You have purchased $40,000 worth of securities earning 12% compounded semiannually. Ten years from now, you plan to use the securities and interest to establish an account earning 7% compounded annually, and to exhaust this account by equal withdrawals at th e end of each year for five years. How much will each withdrawal be?

9. After your down payment on a new house, you will owe $120,000. You agree to pay off this balance in equal monthly payments for the next 25 years. If interest is 12% compounded monthly, what will be the amount of each monthly payment? How much interest have you paid?

10. You plan to take a world cruise five years from now and you estimate you will need $8,000. You wish to acquire this amount be making equal annual deposits into an account which pays 6% compounded annually. Find the amount of each deposit?

11. How much should be deposited now at 8% compounded semiannually to make possible equal withdrawals of $5,000 at the end of each year for six years, the first withdrawal to be made 10 years from now? Assume an ordinary annuity for the withdrawal period with interest to be 7% compounded annually.

12. Nine years from now, you wish to have an amount available to deposit to an account that will earn 6% compounded annually. This account is to provide you with an income of $10,000 at the end of each year for 11 years. T accomplish this, you invest in a nine year certificate of deposit that pays 8% compounded quarterly, and you will use this certificate plus its interest to es tablish your income account. What should the principal value of the certificate be?

13. On the day of their son’s birth, Mr. and Mrs. Su decided to set aside a sum of money to provide for his college education. They wish to make a single deposit in a bank that pays 9% compounded annually in order to provide a payment of $12,999 on each of the son’s 18 th , 19 th , 20 th , 21 st birthdays. How much should they deposit?

14. During a three year period when your income was high you were able to deposit $120 0 at the end of each month in an account earning 12% compounded monthly. Your income went down and you could not continue the deposits. Moreover, the interest rate on your accumulated deposits fell to 8% compounded quarterly and remained at this rate for 14 years, at which time you decided to exhaust the account by withdrawing equal amounts at the end of every six months for 5 years. The interest rate was 8% compounded semiannually over the time of the withdrawals. How much did you withdraw every six mo nths?

15. If $100 is deposited every six months for four years at 4 percent, compounded semiannually, what will be the accumulated amount after the last deposit?

16. What periodic payment would be required to amortize a $1000 debt in eight semiannual payments of interest is 6 percent, compounded semiannually?

17. If interest is 8 percent (a) compounded quarterly, (b) compounded continuously To what sum will a deposit of $500 grow in 10 years?

18. What annual payment to a sinking fund is required if $5000 is to be av ailable after the ninth payment? Interest is 7 percent, compounded annually.

19. What sum of money deposited now will grow to $1000 in eight years at 4 percent, compounded semiannually?

20. How much should be deposited now at 5 percent, compounded annually, to make possible withdrawals of $500 per year for the next 10 years?

21. A man borrows $3000 to pay for construction of a garage. He is to repay the debt in equal semiannual installments over the next 10 years. What should be the amount of each payment if inte rest is 10 percent, compounded semiannually?

22. If it is stated that productivity of a manufacturing company, as measured by dollars of output per man - hour worked, has increased 5 percent per year and is presently $8.50 per man - hour, what was the corresponding figure of productivity 10 years ago?

23. A man deposits $200 every quarter at 8 percent, compounded quarterly. How much will he have in his account at the end of 10 years?

24. A man wishes to establish an account from which his son can draw $1500 a year for four years. If the account earns interest at 6 percent, compounded annually, how much should the man deposit in the account?

25. Taxes on a piece of property are $900 per year. If taxes increase 2 percent per year, what will be the tax on the pro perty 40 years from now?

26. A man plans to buy a house five years from now, and he wants to accumulate $3000 for a down payment by depositing equal amount s each quarter in a bank which pays 4 percent, compounded quarterly. What should be the amount of each deposit?

27. Mr. Smith purchases a house at $310,000. He pays $40,000 cash and takes a 10 year mortgage for the remainder at 7 percent compounded monthly. What will his monthly mortgage payment be? How much interest will he pay during the 10 years?

28. Mr. B rown takes out a $30,000, 15 year mortgage, at 8 percent compounded monthly. What will his monthly mortgage payment be? How much interest will he pay during the fifteen years?

29. Det ermine the amount of money you should deposit at the beginning of each month for 15 years to accumulate $20,000 if money earns 4% compounded monthly. Annotations

Answer #1

Question No : 3
If you deposit 10 $ in an account, that pays 5% interest,
compounded annually, how much you will have at the end of 10 years?
50 years and 100 years
How much will be in account at the end of 5 years the amount
deposited today is 10,000 and interest is 8% per year, compounded
semiannually?
How much would I have to deposit in an account today that pays
12% interest, compounded quarterly, so that I...

You want to make equal deposits at the end of each month for 10
years into an account with annual interest rate 8% compounded
monthly, and then withdraw $200 at the end of each month for the
following 15 years, ending with a zero balance. How much do your
monthly deposits need to be?

A man aged 30 deposits $500 at the end of each month for 35
years into a registered retirement savings account fund paying
interest at 4% compounded annually.
Starting on his 65th birthday, he makes 120 equal
monthly withdrawals from the fund at the beginning
of each month. During this period, the fund pays interest at 7%
compounded annually. Calculate the amount of each
withdrawal (annuity payment). A timeline may assist you in solving
this calculation. (10 points)

For 1 and 2 find the compound amount on the given original
principal at the compound interest rate for the indicated term:
1. $1200 for 4 years at 4.2% compounded annually.
2. $800 for 5 years at 4% compounded monthly.
3. If you deposit $6800 into an account paying 5% annual
interest compounded quarterly, how much will be in the account
after 10 years if you make no withdrawals?
4. Suppose you are depositing an amount today in an account...

Maggie wants to establish an annuity for retirement purposes.
She wants to make quarterly deposits for 20 years so that she can
then make quarterly withdrawals of $5,000 for 10 years. The annuity
earns 7.32% compounded quarterly.
(A) How much will have to be in the account at the time she
retires?
(B) How much should be deposited each quarter for 20 years in order
to accumulate the required amount? (C) What is the total amount of
interest earned during...

A man aged 30 deposits $600 at the end of each month for 35
years into a registered retirement savings account fund paying
interest at 3% compounded annually.
Starting on his 65th birthday, he makes 120 equal
monthly withdrawals from the fund at the beginning
of each month. During this period, the fund pays interest at 6%
compounded annually. Calculate the amount of each
withdrawal (annuity payment). A timeline may assist you in solving
this calculation.

You have deposited $10,000 in a bank earning interest at 7% p.a.
compounded quarterly for four years and five months. At that time,
the interest rate changes to 6% p.a. compounded monthly. What is
the value of the deposit three years after the change in the rate
of interest?
What nominal annual rate compounded quarterly is equivalent to
7.5% p.a. compounded monthly?
You have decided to deposit $500 in the Montreal bank at the end
of each quarter for seven...

1. You are currently considering buying a new car. The
price is $ 15,000 and you have $ 2,000 for the soon. If you can
negotiate a rate of 10% and want to pay for the car in a period of
five years. How much would the payment be?
2. Ruiz Motor is financing a new truck with a loan of $ 10,000 to
be repaid in five installments of $ 2,504.56 to be made at the end
of the...

You plan to make five deposits of $1,000 each, one every 6
months, with the first payment being made in 6 months. You will
then make no more deposits. If the bank pays 7% nominal interest,
compounded semiannually, how much will be in your account after 3
years? Round your answer to the nearest cent.
$
One year from today you must make a payment of $11,000. To
prepare for this payment, you plan to make two equal quarterly
deposits...

1. John wishes to make a quarterly deposit into his savings
account so that at the end of 10 years the account balance will be
$10,000. If the account earns 6% annual interest, compounded
quarterly, how much should he deposit each quarter?
2. The maintenance on a machine is expected to be $155 at the
end of the first year, then increasing by $35 each year for the
next 7 years. What sum of money would need to be set...

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