Instructions:

a. Match each question with the method listed below that would be used in providing a solution.

b. Compute the answer to each of the following questions listed below and on the right.

Method

A. Present Value or Future Value of a Single Sum

B. Future Value of an Ordinary Annuity

C. Future Value of an Annuity Due

D. Present Value of an Ordinary Annuity

E. Present Value of an Annuity Due

F. Present Value of a Defferred Annuity

Questions

1. How much will Tome receive if he invests $1,000 for 1 year at 5%?

2. How much should Bob deposit at the end of each 6-month period to accumulate $20,000 when he graduates in 4 years assuming that he can earn an annual rate of 10% compounded semiannually?

3. What rate of interest must Connie earn on an investment of $60,000 to be able to withdraw $9,000 at the beginning of each year for the next 10 years?

4. What amount should Gary invest now at 12% to provide 5 payments of $5,000 at the end of each year, starting 3 years from now?

5. How many years will it take to accumulate $20,000 in Brent invests $1,845 at 10%?

6. If Daisy invests $3,000 at 8% with interesr computed on the principal plus undistributed interest, how much will she have at the end of 10 years (annual compounding)?

7. If Pat has $15,000 in a bank earning 6% interest compounded annually, how much can he withdraw at the end of each year for the next 8 years?

8. At what annually compounded interest rate must Dave invest $25,331 to provide $50,000 at the end of 6 years?

9. How much should Karen deposit on each birthday beginning on her twentieth birthday to accumulate $50,000 on her 50th birthday, assuming that she can earn 12% interest compounded anually (no deposit on her fiftieth birthday)?

10. How much should Mark set aside now, assuming that he can earn 8% interest compounded annually, so he can withdraw $10,000 at the end of each year for the next 10 years?