Question

1. Calculate the accumulated value of an ordinary annuity of $4,200 a year for 6 years if the money is worth 71 2 %.

2. Find the future value of the cash flow of $600 a month for 5 years at 9% interest compounded monthly.

3. If Gabe makes a $450 deposit into his savings fund at the end of each quarter for 6 years, how much will he be able to collect at the end of the sixth year if the money is worth 63 4 %?

4. If Brenda contributes $630 at the end of each month to her retirement account that pays 83 4 % compounded semiannually, how much will she have when she retires 20 years from the start of contributions?

5. If $970 must be paid to an organization at the end of each month for the next 10 years, how much money is needed now if the interest is 12%?

6. Find the discounted value of an ordinary annuity of $1,490 a month for 3 years if the interest is 141 4 % compounded quarterly.

7. What is the current value of an annuity of $7,500 paid at the end of each half-year for 10 years in an account bearing 111 2 % compounded annually?

8. A couple wants to renovate their house in 3 years. They need $27,000 which they plan to save for in monthly payments in an account that pays 81 2 % compounded monthly. How much would their monthly savings be?

9. Wayne wants to set up a monthly payment for his daughter, who plans to live in another state for the next four years. He deposited $40,000 for her automatic bank payments. If the bank pays 71 4 % interest compounded semiannually, how much will she receive each month?

10. Rosemary would like to buy a chalet overlooking the Alps for $300,000. She can save up to $10,000 a month in an account paying 15% interest compounded monthly. How long will it take her to wait?

11. A local college receives a $500,000 gift from an alumnus’s widow to establish a scholarship of $10,000 a year. If the college invests the gift in an account bearing 111 2 % interest compounded quarterly, how many years will the gift last?

12. A restaurant owner wants to buy new kitchen equipment for $25,000. He would like to pay for it through saving up $2,000 a week in a fund that pays 10% interest compounded monthly. How long should he wait to save the entire amount?

13. If the future value of an annuity is $35,507.50 and the quarterly payment is $1,750 for 9 years, how much will the annuity interest rate be?

14. If you deposit $220 in your savings account at the beginning of each month for 2 years and if your account bears 61 4 % compounded monthly, how much will you save at the end of the 2 years?

15. Find the current value of an annuity due of $900 each week for 11 2 years at 8% interest compounded weekly.

16. Find the future fund for Kelly, who is saving $350 at the beginning of each month for the next 4 years, if her savings account bears 71 2 % interest compounded quarterly.

17. A $75,000 mortgage is obtained at 9%. It should be paid in 20 years. Find the payment at the start of each month.

18. Herb is a self-employed agent who is setting his own retirement fund. He is depositing $17,000 a year for the next 20 years. How much will he be able to collect for his retirement given that his retirement fund bears 11% interest compounded semiannually?

19. Jen needs $20,000 in the near future. She is saving up $875 at the beginning of each month in an account bearing 15% interest compounded annually. When will the $20,000 be available?

20. Find the future value of an annuity of $2,615 payable monthly for 31 2 years that starts after 3 months. The interest rate would be 7%.

Answer 1

1)

Accumulated value Px (1+r)An-1lr Here, 4 5 AInterest rate per annum 6| B|Number of years 7 CNumber of payments per per annum 1 8 ACInterest rate per period (r) 9 BxC Number of periods (n) 10 Payment per period (P) 4,200 2 Accumulated value $30,424.89 4200x( (1+7.5%)^6-1) 7.5% 12 Accumulated value