In the following ordinary annuity, the interest is compounded with each payment, and the payment is made at the end of the compounding period. Find the required payment for the sinking fund. (Round your answer to the nearest cent.) Monthly deposits earning 4% to accumulate $7000 after 10 years.
Just before his first attempt at bungee jumping, John decides to
buy a life insurance policy. His annual income at age 30 is
$35,000, so he figures he should get enough insurance to provide
his wife and new baby with that amount each year for the next 35
years. If the long-term interest rate is 6.3%, what is the present
value of John's future annual earnings? (Round your answer to the
nearest cent.) $___________
Rounding up to the next $50,000, how much life insurance should he
buy? (Round your original answer to the nearest $50,000.)
$
Use the "rule of 72" to estimate the doubling time (in years) for the interest rate, and then calculate it exactly. (Round your answers to two decimal places.)
7.4% compounded weekly.
rule of 72" | yr |
exact answer |
1) No. of months 120
Monthly interest rate 0.0033
Monthly deposit $47.54 =-PMT(4%/12,120,,7000,)
2) No. of yrs 35.00
Per period payment 35000
Interest rate 6.30%
PV $490,082.41 =-PV(6.3%,35,35000,,)
Rounding $500,000.00
3) Rule of 72 9.73 =72/7.4
Exact answer 9.71 =LOG(2,10)/LOG(1+7.4%,10)
In the following ordinary annuity, the interest is compounded with each payment, and the payment is...
1.Just before his first attempt at bungee jumping, John decides to buy a life insurance policy. His annual income at age 30 is $35,000, so he figures he should get enough insurance to provide his wife and new baby with that amount each year for the next 35 years. If the long-term interest rate is 6.5%, what is the present value of John's future annual earnings? a. (Round your answer to the nearest cent.) $ ____________ b. Rounding up to...
In the following ordinary annuity, the interest is compounded with each payment, and the payment is made at the end of the compounding period. Find the required payment for the sinking fund. (Round your answer to the nearest cent.) Monthly deposits earning 4% to accumulate $9000 after 10 years.
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In the following ordinary annuity, the interest is compounded with each payment, and the payment is made at the end of the compounding period. Find the amount of time needed for the sinking fund to reach the given accumulated amount. (Round your answer to two decimal places.) $295 monthly at 5.6% to accumulate $25,000.
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