Question

Brief Exercise G-1 Jozy Altidore invested $7,500 at 8% annual interest, and left the money invested without withdrawing any of the interest for 11 years. At the end of the 11 years, Jozy withdrew the accumulated amount of money. Click here to view the factor table (For calculation purposes, use 5 decimal places as displayed in the factor table provided.) (a) What amount did Jozy withdraw, assuming the investment earns simple interest? Accumulated amount (b) What amount did Jozy withdraw, assuming the investment earns interest compounded annually? (Round answer to 2 decimal places, e.g. 25.25.) Accumulated amount

Answer 1

G1 :

a) Accumulated amount = 7500 + ( 7500 *8%*11) = 14100

b) Accumulated amount = 7500 * FVAF ( 8%, 11years) = 7500 *2.33164 = 17487.3

G6:

Amount to be repaid = 31800 * FVAF ( 7%, 5years) = 44601.09

G8:

a) Present value = 32000 *PV ( 10%, 8 years) = 32000 * 0.46651 = 14928.32

b) Present value = 32000 *PV ( 10%, 7 years) = 32000 * 0.51316 = 16421.12