1) Olivia purchases a retirement annuity that will pay her $1,000 at the end of every six months for the first eleven years and $300 at the end of every month for the next three years. The annuity earns interest at a rate of 4.6% compounded quarterly.

a.What was the purchase price of the annuity?

b.How much interest did Olivia receive from the annuity?

2) The present value of a 6 year lease that requires payments of $650 at the beginning of every month is $44,300. What is the nominal interest rate compounded monthly charged on the lease?

3) Alicia wants to accumulate at least $55,000 by depositing $1,700 at the end of every month into a fund that earns interest at 4.75% compounded monthly.

a.How many deposits does she need to make to reach her goal?

b.How long will it take Alicia to reach her goal?

(years and months)

4) Tiffany invested her savings in a bank at 3.75% compounded monthly. How much money did she invest to enable withdrawals of $2,000 at the beginning of every 6 months from the investment for 8 years, if the first withdrawal is to be made in 9 years?