Question

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 interest rate of 11%, compounded annually. (Round your answer to the nearest cent.)

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(b.1)Suppose that Patty's husband delays starting an IRA for the first 10 years he works but then makes $1600 deposits at the end of each of the next 15 years. If the interest rate is 11%, compounded annually, and if he leaves the money in his account for 5 additional years, how much will be in his account at the end of the 30-year period? (Round your answer to the nearest cent.)

$

(b.2)Does Patty or her husband have more IRA money?

Patty

Patty's husband

c) A small business owner contributes $2,000 at the end of each quarter to a retirement account that earns 10% compounded quarterly.

(c.1) How long will it be until the account is worth at least $150,000? (Round your answer UP to the nearest quarter.)

quarters

(c. 2) Suppose when the account reaches $150,000, the business owner increases the contributions to $6,000 at the end of each quarter. What will the total value of the account be after 15 more years? (Round your answer to the nearest dollar.)

$ =

Answer 1

Future Value of Ordinary Annuity means Annuity amount paid at the end of period.