Course: Mathematics Business and Finance (MBF100)

Title: Future Value and Present Value of a Simple Annuity Due And Future Value and Present Value of a General Annuity Due

Q1. What is the accumulated value of periodic deposits of $40 at the beginning of every month for 23 years if the interest rate is 3.28% compounded monthly?

Round to the nearest cent

Q2.Alexandra invested $2,100 at the beginning of every 6 months in an RRSP for 11 years. For the first 8 years it earned interest at a rate of 4.10% compounded semi-annually and for the next 3 years it earned interest at a rate of 6.20% compounded semi-annually.

a.Calculate the accumulated value of his investment at the end of the first 8 years.

$61,779.35

$62,201.50

$39,294.82

$40,100.37

b.Calculate the accumulated value of her investment at the end of 11 years.

$61,779.35

$62,201.50

$54,140.33

$40,100.37

c.Calculate the amount of interest earned from the investment.

$16,001.50

$15,579.35

$14,561.54

$1,439.96

Q3.Starting on the day Hannah was born, his mother has invested $40 at the beginning of every month in a savings account that earns 3.30% compounded monthly.

a.How much did Hannah have in this account on his 20th birthday? Assume that there was no deposit on that day.

Round to the nearest cent

b.What was his mother's total investment?

Round to the nearest cent

c.How much interest did the investment earn?

Round to the nearest cent

Q4.For 6 years, Janet saved $1,000 at the beginning of every month in a fund that earned 5.25% compounded annually.

a.What was the balance in the fund at the end of the period?

Round to the nearest cent

b.What was the amount of interest earned over the period?

Round to the nearest cent

Q5.A contract requires lease payments of $900 at the beginning of every month for 4 years.

a.What is the present value of the contract if the lease rate is 5.25% compounded annually?

Round to the nearest cent

b.What is the present value of the contract if the lease rate is 5.25% compounded monthly?

Round to the nearest cent

Q6.Blake secured a 4-year car lease at 5.30% compounded annually that required him to make payments of $885.22 at the beginning of each month. Calculate the cost of the car if he made a down payment of $2,750.

Round to the nearest cent