Annuity
1. A car can be purchased by paying $27 000 now or can be leased by paying $725 per month for the next four years, with the first payment due on the day of signing lease. What nominal rate of interest is charged on the lease?
Answer:
4. Raj contributes $150 at the beginning of each month into an RRSP paying interest at 5.5% compounded semi-annually. What will be the accumulated balance in the RRSP at the end of 20 years?
5. Dana and Tim bought a property by agreeing to make semi-annual payments of $2000 for six years. If the first payment is due on the date of purchase and interest if 7% compounded quarterly, what is the purchase price of the property?
6. How much would you have to pay into an account at the beginning of every 5 months to accumulate $9000 in 6 years if interest is 8% compounded quarterly?
7. Rose has saved $90 000. If she decides to withdraw $4000 at the beginning of each month and interest is 6.25% compounded annually, for how long can she make withdrawals?
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1. Find the accumulated value of an annuity due of $500 payable at the beginning of...
1. Find the accumulated value of an annuity due of $500 payable at the beginning of every month for nine years at 8% compounded monthly. 2. Lily purchased a boat valued at $19 000 on an installment plan requiring equal monthly payment for four years. If the first payment is due on the date of purchase and interest is 6.2% compounded monthly, what is the size of the monthly payment? 3. A car can be purchased by paying $27 000...
1. Shirley wants to go on a trip to Hawaii. She budgets that she can save...
1. Shirley wants to go on a trip to Hawaii. She budgets that she can save $108 at the end of every month, and interest in her account is 8% compounded biweekly. By looking at prices, she knows that the trip will cost her $4813 total. How long in years (round to two decimal places) will it take before she can go on her trip? 2. Joey buys a new Honda civic for $18997. He agrees to payments at the...
A) A contract requires that Bob makes payments of $1319 and $3728 to Jim 24 and 45 months respect...
a) A contract requires that Bob makes payments of $1319 and $3728 to Jim 24 and 45 months respectively. Bob would like to change the payment structure to a payment of $1901 today, and a second payment made 45 months from today. If the two sets of payments are economically equivalent, and the interest rate is 6% compounded quarterly, then what is the amount of the second payment? Give your answer rounded to the nearest cent. b) Ellenor pays month-end...
5.) Raj wants to make annual contributions to his RRSP for the next 30 years. He...
5.) Raj wants to make annual contributions to his RRSP for the next 30 years. He will increase each annual payment by 3.5%, and the RRSP can earn 10.3% compounded annually. If he wants to accumulate $350,000, what is the amount of his first payment today?
GENERAL ANNUITY Instruction: Solve the given situations. Show your solutions (5 points each). 1. Soledad decides...
GENERAL ANNUITY Instruction: Solve the given situations. Show your solutions (5 points each). 1. Soledad decides to save P2,700 at the end of every 6 months, which is the amount paid into her retirement plan by the company where she works. If she chooses an investment fund that guarantees 8% per year compounded quarterly, how much will she have in 10 years? 2. What is the present value of an annuity of P7,300 per semi-annual period for 7 years at...
Richard leased equipment worth $35,000 for 9 years and will own it outright at the end...
Richard leased equipment worth $35,000 for 9 years and will own it outright at the end of the lease with no further payment. Calculate the size of the monthly lease payments if the lease rate is 6.53% compounded monthly. Note: Lease payments are made at the beginning of each month. yummy paid off a mortgage by paying $700 per month for 14 years. What was the original amount of the mortgage if the interest rate charged was 4.20% compounded semi-annually?
7. How much interest is included in the future value of an ordinary simple annuity of...
7. How much interest is included in the future value of an ordinary simple annuity of $1,350 paid every six months at 6% compounded semi-annually if the term of the annuity is 2 years? The interest is $ (Round the final answer to the nearest cent as needed. Round all intermediate values to six decimal places as needed.) 8. Glenn has made contributions of $250 at the end of every three months into an RRSP for ten years. Interest for...
Sine has an RRSP that already contains $100,000. She intends to make deposits of $600 at...
Sine has an RRSP that already contains $100,000. She intends to make deposits of $600 at the end of each month for the next 25 years into this RRSP (which pays interest at 8% compounded monthly). When she retires in 25 years (at the age of 65). she intends to withdraw monthly (end of month) payments for the next 30 years (until she is 95). What is the amount of the monthly withdrawal if the RRSP earns 6% compounded semi-annually...
A major property developer is concerned about lack of sales due to local economic conditions. To...
A major property developer is concerned about lack of sales due to local economic conditions. To ensure that his condos are occupied, he offers a lease-to-purchase program in which, if people sign a lease by the end of March, they will not have to start making payments until March of the following year. The purchase price of the condo is $191,000. Payments of $1065.67 will be required at the beginning of each month over a 25-year amortization period. If interest...
A $ 500 bond matures on March 1, 2018. Interest is 6% payable semi- annually. Find...
A $ 500 bond matures on March 1, 2018. Interest is 6% payable semi- annually. Find the purchase price of the bond on September 1, 2012, to yield 7.5% compounded semi- annually. A $ 25 000, 7% bond is purchased twelve years before maturity to yield 5% compounded semi- annually. If the bond interest is payable semi- annually, what is the purchase price of the bond? A $ 100 000, 8% bond redeemable at par with quarterly coupons is purchased...
1. Find the accumulated value of an annuity due of $500 payable at the beginning of every month for nine years at 8% compounded monthly. 2. Lily purchased a boat valued at $19 000 on an installment plan requiring equal monthly payment for four years. If the first payment is due on the date of purchase and interest is 6.2% compounded monthly, what is the size of the monthly payment? 3. A car can be purchased by paying $27 000...
5.) Raj wants to make annual contributions to his RRSP for the next 30 years. He will increase each annual payment by 3.5%, and the RRSP can earn 10.3% compounded annually. If he wants to accumulate $350,000, what is the amount of his first payment today?
GENERAL ANNUITY Instruction: Solve the given situations. Show your solutions (5 points each). 1. Soledad decides to save P2,700 at the end of every 6 months, which is the amount paid into her retirement plan by the company where she works. If she chooses an investment fund that guarantees 8% per year compounded quarterly, how much will she have in 10 years? 2. What is the present value of an annuity of P7,300 per semi-annual period for 7 years at...
Richard leased equipment worth $35,000 for 9 years and will own it outright at the end of the lease with no further payment. Calculate the size of the monthly lease payments if the lease rate is 6.53% compounded monthly. Note: Lease payments are made at the beginning of each month. yummy paid off a mortgage by paying $700 per month for 14 years. What was the original amount of the mortgage if the interest rate charged was 4.20% compounded semi-annually?
7. How much interest is included in the future value of an ordinary simple annuity of $1,350 paid every six months at 6% compounded semi-annually if the term of the annuity is 2 years? The interest is $ (Round the final answer to the nearest cent as needed. Round all intermediate values to six decimal places as needed.) 8. Glenn has made contributions of $250 at the end of every three months into an RRSP for ten years. Interest for...
Sine has an RRSP that already contains $100,000. She intends to make deposits of $600 at the end of each month for the next 25 years into this RRSP (which pays interest at 8% compounded monthly). When she retires in 25 years (at the age of 65). she intends to withdraw monthly (end of month) payments for the next 30 years (until she is 95). What is the amount of the monthly withdrawal if the RRSP earns 6% compounded semi-annually...
A $ 500 bond matures on March 1, 2018. Interest is 6% payable semi- annually. Find the purchase price of the bond on September 1, 2012, to yield 7.5% compounded semi- annually. A $ 25 000, 7% bond is purchased twelve years before maturity to yield 5% compounded semi- annually. If the bond interest is payable semi- annually, what is the purchase price of the bond? A $ 100 000, 8% bond redeemable at par with quarterly coupons is purchased...
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