Chapter 5: Time Value of money (Annuities) 5) Solve for future value of an annuity: If you deposit $500 each month (at the end of the month) into an account, how much will be in the account after 8 years if the interest earned is a nominal 6% per year (compounded monthly)? 6) Present value of an annuity: What is the highest price car you can afford if you want your monthly payments to be $300 a month and you can put down $2,500. The interest rate is a nominal 4% per year compounded monthly. You want to make payments over a 5 year period. 7) Solve for Interest in an annuity? You started saving $800 a month (at the end of each month) 20 years ago. Today you notice the balance on the account is now $900,000. What is the nominal interest rate you earned on your savings? 8) Solve for Number of periods in an annuity: You have $15,000 saved today and plan on saving another $400 a month. You want the account to be worth $1.8 million. How long will it take to reach your goal if the interest rate is 8% per year compounded monthly? 9) Effective annual rate: A credit card charges you an APR of 14% per year with monthly compounding. What is the Effective Annual Rate