1. Company A needs to accumulate a $50,000 fund by making five equal annual deposits. Assuming a 7% interest accumulation, how much must be deposited a the end of each year?

2. Company B owes a $50,000 debt that is now due (January 1, 2016). Arrangements have been made to pay it off in 5 equal annual installments starting December 31, 2016 (an ordinary annuity situation). Assuming 8% interest, how much will the annual payment be?

The following table values are provided for use in solving the following independent problems (show computations): n-5 Value Future value of $1 Present value of $1 Future value of annuity of $1 Present value of annuity of $1* *Ordinary annuity 6% 1.3382 -7473 5.6371 4.2124 7% 1.4026 7130 5.7507 4.1002 8% 1.4693 6806 5.8666 3.9927