Word Problems

9. Find the present value {the amount that should be invested now to accumulate the lollowing amount) it the money is compounded as indicated, 513,623.36 at 5.9% compounded annually for 8 years. 10. Suppose 310.000 is invested at an annual rate of 5% fer 15 years. Find the future value if interest is compounded as follows. a. Annually b. Quarterly 6. Monthly d. Daily (365 days) a. Continuously 11. Suppose that Bank A pays 3.69% interest compounded quarterly on an 8year CD. while Bank B pays 3.68% compounded daily. a. What are the effective rates for the two CDs? Use a 365-day year. It. Suppose 55000 was invested in each of these accounts. Find the compound amount after eight years for each account. 12. A company will need $30,000 in 7 years for a new addition. To meet this goal, the company deposits money in an account today that pays 9% annual interest compounded quarterly. Find the amount that should be invested to total $30,000 in 7 years. 13. Find the future value of the ordinary annuity. Interest is compounded annually. R=5000z i=0.06: n=15 14. Find the future value of an ordinary annuity if payments are made in the amount R and interest is compounded as given. Then determine how much of this value is trom contributions and how much is from interest. R=9.100; 8% interest compounded semiannually for 4 years. 15. Find the future value of an ordinary annuity 'rf payments are made in the amount R and interest is compounded as given. Then determine how much of this value is [torn contributions and how much is from interest. R=15.000: 4,?% interest compounded quarterly for 8 years. 16. Find the interest rate needed for the sinking fund to reach the required amount. Assume that the compounding period is the same as the payment period. $24,751 to be accumulated in 5 years; quarterly payments 0151075 17. Find the periodic payment which will amount to a sum of $21000 if an interest rate 5% is compounded annually at the end of 3 consecutive years. 18. Find the amount of each payment to be made into a sinking fund earning 7% compounded monthly to accumulate $89,000 over 8 years. Payments are made at the end of each period] 19. Find the future value of the following annuity due. Assume that interest is compounded annually. there are n payments of R dollars, and the interest rate is i. R i n 16.000; 0.04; 5