Financial Math

1. Find the future value of the ordinary annuity. Interest is compounded annually.

R = $3000; i = 0.06; n =15

2. Find the future value of an ordinary annuity if payments are made in the amount R and interest is compounded as given. Then determine how much of this value is from contributions and how much is from interest. R = 9,000; 4% interest compounded semiannually for 7 years.

3. Find the periodic payment which will amount to a sum of $22000 if an interest rate 8% is compounded annually at the end of 18 consecutive years.

4. Find the size of each of 4 payments made at the end of each year into a 5% rate sinking fund which produces $46000 at the end of 4 years.

5. Find the future value of the following annuity due. Payments of $200 for 4 years at 5% compounded semiannually

6. Suppose a 40-year-old person deposits $8,000 per year in an Individual Retirement Account until age 65. Find the total in the account with the following assumption of an interest rate. (Assume quarterly compounding, with payments of $2,000 made at the end of each quarter period.) Find the total amount of interest earned.

7%

7. Ingrid wants to buy a $20 comma 000 car in 6 years. How much money must she deposit at the end of each quarter in an account paying 5.7% compounded quarterly so that she will have enough to pay for her car?
8. A father opened a savings account for his daughter on the day she was born, depositing $1100. Each year on her birthday he deposits another $1100, making that last deposit on her 21st birthday. If the account pays 4.25% interest compounded annually, how much is in the account at the end of the day on his daughter's 21st birthday? How much interest has been earned?

9. Find the payment necessary to amortize a 4 % loan of $ 1200 compounded quarterly comma with 6 quarterly payments. Find (a) the payment necessary to amortize the loan and (b) the total payments and the total amount of interest paid based on the calculated quarterly payments. Then create an amortization table to find (c) the total payments and total amount of interest paid based upon the amortization table.

10. Complete parts a, b, and c for the loan described below. (a) Find the payment necessary to amortize the loan. (b) Find the total payments and the total amount of interest paid based on the calculated annual payments. (c) Create an amortization table and find the total payments and total amount of interest paid based upon the amortization table.

A 8 % loan of $ 50,000 compounded annually, with 5 annual payments.