Use future and present values of one dollar and annuities to solve the following problems

1. Find the future values of the following ordinary annuities:

a. $500 per year for 10 years at 10%

b. $500 per year for 4 years at 0%.

2. Jones, a write, wants to establish a retirement account where he can deposit $1,000 per year for 30 years compounded. If he earns 6% fix per year on his investment, how much is going to have when he retires in 30 years?

3. A finance company offers to sell you a note for $15,662.45 that will pay $2,440.50 per year for 10 years. If you decide to purchase the note, what rate of interest will you be earning?

4. John has a choice of investing $25,000 in a savings account that pays 8% compounded semiannually or investing in another business venture that will pay $40,000 after years. Which is a better investment for John and why?

5. Find an amount of an annuity for 10 years with a payment of $5,000 per year at an annual percentage rate of 10%, then solve the problem for an annuity due.

6. Find an effective rate that corresponds to a nominal rate of 8% compounded quarterly.

7. An annuity consists of equal payments at the end of each quarter for 5 years to be purchased for $10,000. If the interest rate is 8% compounded quarterly, how much is each payment?

8. You are getting a $100,000 loan from your bank at an annual percentage rate of 8% for 10 years.

a. What would be your yearly payment?

b. What is the total interest that you will be paying to the bank?

9. A car is purchased for $5,000 down with payments of $350 at the end of every 6 months for 5 years. If interest is 8% compounded semiannually, find the corresponding cash value of the car.

10. What amount is worth more? $2,000 today or $4,000 due in 6 years at 14% and why?