Question
1. Mr. Bill S. Preston, Esq., purchased a new house for $100,000. He paid $10,000 down and agreed to pay the rest over the next
1. Mr. Bill S. Preston, Esq., purchased a new house for $100,000. He paid $10,000 down and agreed to pay the rest over the next 25 years in 25 equal end-of-year payments plus 12 percent compound interest on the unpaid balance. What will these equal payments be?
The equal payments will be $_____.
2. What is the present value of the following annuities?
a. $1,600 a year for 10 years discounted back to the present at 9 percent.
b. $70 a year for 5 years discounted back to the present at 7 percent.
c. $300 a year for 12 years discounted back to the present at 13 percent.
d. $580 a year for 4 years discounted back to the present at 6 percent.
What is the present value of $1,600 a year for 10 years discounted back to the present at 9 percent?
_____.
What is the present value of $70 a year for 5 years discounted back to the present at 7 percent?
_____.
What is the present value of $300 a year for 12 years discounted back to the present at 13 percent?
_____.
What is the present value of $580 a year for 4 years discounted back to the present at 6 percent?
_____.
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