1. Find i (the rate per period) and n (the number of periods) for the following annuity
Quarterly deposits of $1,200 are made for 3 years into a annuity that pays 5.5% compound quarterly.
2. Use the future value formula to find the indicated value.
3. Use the future value formula to find the indicated value.
4. Recently, More money 4U offered an annuity that pays 6.0% compound monthly. If $1995 is deposited into this annuity every month, how much is in the account after 6 years? How much of this is interest?
5. In order to accumulate enough money for a down payment on a house, a couple deposits $783 per month into an account paying 6% compounded monthly. If payments are made at the end of each period, how much money will be in the account in 5 years?
6. Acme Annuities recently offered an annuity that pays 7.8% compounded monthly. What equal monthly deposit should be made into this annuity in order to have $159,000 in 18 years?
7. A company estimates that it will need $104,000 in 6 years to replace a computer. If it establishes a sinking fund by making fixed monthly payments into an account paying 5.9% compounded monthly, how much should each payment be?
8. Bob makes his first $1900 deposit into an IRA earning 6.9% compounded annually on his 24th birthday and his last $1900 deposit on his 39th birthday (16 equal deposits in all). With no additional deposits, the money in the IRA continues to earn 6.9% interest compounded annually until Bob retires on his 65th birthday. How much is it in the IRA when Bob retires?
9. Find I (the rate per period) and n (the number of periods) for the following loan at the given annual rate.
Monthly payments of 4272.25 are made for 9 years to repay a loan at 5.75% compounded monthly.
10. Solve the following problem
N=25; i=0.028; PMT =$148; PV=?
11. Solve the following problem
PV=$20,684; n=80; i=0.012; PMT=?;
12. American General offers a 19-year annuity with a guaranteed rate of 6.3% compounded annually. How much should you pay for one of these annuities if you want to receive payments of $600 annually over the 19 year period?
How much should a customer pay for this annuity?
13. E-Loan, an online lending service, recently offered a 36-month auto loans at 3.9% compounded monthly to applicants with good credit ratings. If you can have a good credit rating and can afford monthly payments of $400, how much can you borrow from E-loan? What is the total interest you will pay for this loan?
14. You want to purchase an automobile for $28,695. The dealer offers you 0% financing for 72 months or a $3,312 rebate. You can obtain 5.7% financing for 72 months at the local bank. Which option should you choose?
___0% financing – This is better as monthly outgo is lower.
How much money will you save per month?
15. A sailboat costs $28,681. You pay 25% down and amortize the rest with equal monthly payments over a 9-month period. If you must pay 6.6% compounded monthly, what is your monthly payment? How much interest will you pay?
16. Some friends tell you that they paid $17,389 down on a new house and are to pay $630 per month for 30 years. If interest is 6.3% compounded monthly, what was the selling price of the house? How much interest will they pay in 30 years?
17. A family has a $96,382, 30 year mortgage at 5.7% compounded monthly. Find the monthly payment. Also find the unpaid balance after 5 years and after 10 years.