Series of Compound Interest Techniques

The following are several situations involving compound interest.

Required:

Using the appropriate table, solve each of the following:

(Click here to access the time value of money tables to use with this problem.)

1.Hope Dearborn invests $40,000 on January 1, 2016, in a savings account that earns interest of 8% compounded semiannually. What will be the amount in the fund on December 31, 2021?

Round your answer to two decimal places.

2. Ben Johnson receives a bonus of $5,000 each year on December 31. Beginning on December 31, 2016, he deposits his bonus every year in a savings account that earns interest of 12% compounded annually. What will be the amount in the fund on December 31, 2020, after he deposits his bonus received on that date?

Round your answer to two decimal places.

3. Ron Sewert owes $30,000 on a non-interest-bearing note due January 1, 2026. He offers to pay the amount on January 1, 2016, provided that it is discounted at 10% on a compound annual discount basis. What would he have to pay on January 1, 2016, under this assumption?

Round your answer to two decimal places.

4. June Stickney purchased an annuity on January 1, 2016, which, at a 12% annual rate, would yield $6,000 each June 30 and December 31 for the next 6 years. What was the cost of the annuity to Stickney?

Round your answer to two decimal places.

5. Five equal annual contributions are to be made to a fund, with the first deposit on December 31, 2016. Determine the equal contributions that, if invested at 10% compounded annually, will produce a fund of $30,000 on December 31, 2021.

Round your answer to two decimal places.

6. Beginning on December 31, 2017, 6 equal annual withdrawals are to be made. Determine the equal annual withdrawals if $11,000 is invested at 10% interest compounded annually on December 31, 2016.

Round your answer to two decimal places.