Question
I need help having a tough time with these types of questions. 1. What's the future value of a 12%, 5-year ordinary annuity that pays
I need help having a tough time with these types of questions.
1. What's the future value of a 12%, 5-year ordinary annuity that pays $800 each year? If this was an annuity due, what would its future value be? Do not round intermediate calculations. Round your answers to the nearest cent.
Future Value of an Ordinary Annuity: ____$
Future Value of an Annuity Due: ____ $
2.
Find the following values using the equations and then a financial calculator. Compounding/discounting occurs annually. Do not round intermediate calculations. Round your answers to the nearest cent.
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An initial $800 compounded for 1 year at 5%.
_____$
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An initial $800 compounded for 2 years at 5%.
_____$
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The present value of $800 due in 1 year at a discount rate of 5%.
______$
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The present value of $800 due in 2 years at a discount rate of 5%.
_____$
3.
You want to buy a car, and a local bank will lend you $35,000. The loan will be fully amortized over 5 years (60 months), and the nominal interest rate will be 6% with interest paid monthly. What will be the monthly loan payment? What will be the loan's EAR? Do not round intermediate calculations. Round your answer for the monthly loan payment to the nearest cent and for EAR to two decimal places.
Monthly loan payment:___ $
EAR: ____ %
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