1. A company wants to have $50,000 at the beginning of each 6-month period for the next 4 1/2 years. If an annuity is set up for this purpose, how much must be invested now if the annuity earns 6.65%, compounded semiannually?

(a) Decide whether the problem relates to an ordinary annuity or an annuity due.

ordinary annuityannuity due

(b) Solve the problem. (Round your answer to the nearest cent.)

2. Recent sales of some real estate and record profits make it possible for a manufacturer to set aside $1,100,000 in a fund to be used for modernization and remodeling. How much can be withdrawn from this fund at the beginning of each half-year for the next 5 years if the fund earns 6.1%, compounded semiannually?

(a) Decide whether the problem relates to an ordinary annuity or an annuity due.

ordinary annuityannuity due

(b) Solve the problem. (Round your answer to the nearest cent.)

3. A $4.8 million state lottery pays $20,000 at the beginning of each month for 20 years. How much money must the state actually have in hand to set up the payments for this prize if money is worth 8.1%, compounded monthly?

(a) Decide whether the problem relates to an ordinary annuity or an annuity due.

annuity dueordinary annuity

(b) Solve the problem. (Round your answer to the nearest cent.)

4. A used piece of rental equipment has 5 1/2 years of useful life remaining. When rented, the equipment brings in $500 per month (paid at the beginning of the month). If the equipment is sold now and money is worth 4%, compounded monthly, what must the selling price be to recoup the income that the rental company loses by selling the equipment "early"?

(a) Decide whether the problem relates to an ordinary annuity or an annuity due.

annuity dueordinary annuity

(b) Solve the problem. (Round your answer to the nearest cent.)

5. As the contestant with the longest winning streak in the history of Jeopardy, Ken Jennings won more than $2.5 million. Suppose he invested $1.8 million in an ordinary annuity that earned 7.2%, compounded monthly. How much would he receive at the end of each month for the next 25 years?

(a) Decide whether the problem relates to an ordinary annuity or an annuity due.

ordinary annuityannuity due

(b) Solve the problem. (Round your answer to the nearest cent.) $

6. Juanita Domingo's parents want to establish a college trust for her. They want to make 16 quarterly withdrawals of $1500, with the first withdrawal 3 months from now. If money is worth 7.9%, compounded quarterly, how much must be deposited now to provide for this trust?

(a) Decide whether the problem relates to an ordinary annuity or an annuity due.

ordinary annuityannuity due

(b) Solve the problem. (Round your answer to the nearest cent.)