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Solve the following by using formulas. Present value of an annuity due. Do not round intermediate calculations. Round your answer to the nearest cent. Annuity

Solve the following by using formulas.

Present value of an annuity due. Do not round intermediate calculations. Round your answer to the nearest cent.

Annuity Payment Payment Frequency Time Period (years) Nominal Rate (%) Interest Compounded Present Value of the Annuity
$650 every month 8 5.6 monthly $

Solve the following by using the amortization formula. Round your answer to the nearest cent. Do not round intermediate calculations.

Loan Payment Payment Frequency Time Period (years) Nominal Rate (%) Interest Compounded Present Value (Amount of Loan)
$ every year 6 12 annually $7,000

Solve the following by using Table 12-2.

Jami Minard wants to receive an annuity of $1,600 at the beginning of each quarter for the next 9 years. How much should be deposited now at 2% compounded quarterly to accomplish this goal? Round your answer to the nearest cent.

Click here for Table 12-2

$

Solve the following by using formulas. Do not round intermediate calculations. Round your answer to the nearest cent.

Ordinary Annuity

Annuity Payment Payment Frequency Time Period (years) Nominal Rate (%) Interest Compounded Future Value of the Annuity
$3,500 every 6 months 3 13 semiannually $

BUSINESS DECISION: DON'T FORGET INFLATION!

You are the vice president of finance for Neptune Enterprises, Inc., a manufacturer of scuba diving gear. The company is planning a major plant expansion in 4 years. You have decided to start a sinking fund to accumulate the funds necessary for the project. Your company's investments yield 12% compounded semiannually. It is estimated that $2,300,000 in today's dollars will be required; however, the inflation rate on construction costs and plant equipment is expected to average 6% per year for the next 4 years.

a. Use the compound interest concept to determine how much will be required for the project, taking inflation into account. Round your answer to the nearest dollar.

Click here for Table 11-1

$

b. What sinking fund payments will be required at the end of every 6-month period to accumulate the necessary funds? Round your answer to the nearest cent.

Click here for Table 12-1

$

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