WEEK THREE

1. (Compound interest) To what amount will the following investments accumulate?

a. $5,200 invested for 10 years at 11 percent compounded annually.

b. $8,000 invested for 7 years at 9 percent compounded annually.

c. $775 invested for 13 years at 11 percent compounded annually.

d. $19,000 invested for 5 years at 6 percent compounded annually.

a. To what amount will $5,200 invested for 10 years at 11 percent compounded annually accumulate?

$(Round to the nearest cent.) ANSWER:

b. To what amount will $8,000 invested for 7 years at 9 percent compounded annually accumulate? $ (Round to the nearest cent.) ANSWER:

c. To what amount will $775 invested for 13 years at 11 percent compounded annually accumulate?

$(Round to the nearest cent.) ANSWER:

d. To what amount will $19,000 invested for 5 years at 6 percent compounded annually accumulate?

$(Round to the nearest cent.) ANSWER:

2. (Loan amortization) On December 31, Beth Klemkosky bought a yacht for $80,000, paying $20,000

down and agreeing to pay the balance in 5 equal end-of-year installments at 14 percent interest on the declining balance. How big will the annual payments be? These equal payments will be $(Round to the nearest cent.) ANSWER:

PLEASE ANSWER EACH (BOTH) QUESTION FULLY AND CORRECTLY!!!