1. What is the implied annual rate if you deposit $750 and receive $2,000 in 8 years, assuming interest is compounded quarterly?

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2. How many months it will take to grow your money from $10,250 to $25,000 if you can earn an interest of 8% compounded monthly? How many years will it take?

Ã‚Â 3. How many years it will take to grow your money from $3308 to $9537 if you can earn an interest of 15% compounded quarterly? Ã‚Â |

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4. The difference between an ordinary annuity and an annuity due is the:

a. timing of the annuity payments.

b. interest rate applied to the annuity payments.

c. number of annuity payments.

d. amount of each annuity payment.

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5. Which one of the following is an annuity due?

a. $225 paid at the end of each monthly period for an infinite period of time

b. $100 paid at the end of each monthly period for one year

c. $225 paid forever

d. $600 paid at the beginning of every quarter for five years, starting today

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6. What is the present value of $150 received at the beginning of each year for 16 years? The first payment is received today. Use a discount rate of 9%.

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7. What is the present value of $250 received at the beginning of each year for 21 years? Assume that the first payment is received today. Use a discount rate of 12%

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8. What is the future value of semi-annual payments of $6,500 for eight years at 12 percent?

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9. You are considering an investment which would entail $5,000 payments each year for 20 years. The investment will pay 7 percent interest. How much will this investment be worth at the end of the 20 years?

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10. Kelly starting setting aside funds six years ago to buy some new equipment for her firm. She has saved $2,000 each quarter and earned an average rate of return of 7.5 percent. How much money does she currently have saved for this purpose?

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11. Today, you are purchasing a $85,000 20-year car loan at 6 percent. You will pay annually at the end of each year. What is the amount of each payment?

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12. You just won a lottery that will pay you $2,500 a year for twenty years. You will receive your first payment today. If you can earn 8 percent on your money, what are your winnings worth to you today? (Note that since you will receive your first payment today, it is an annuity due problem).

Subject | Mathematics |

Due By (Pacific Time) | 10/25/2015 07:00 pm |

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