1. The amount to which a single sum would accumulate at compound interest by the end of a specified period (interest compounded annually)

2. The amount that must be deposited at the beginning of each of a specific number of years to provide for the accumulation, at annually compounded interest, of $1.02

3. The amount that must be deposited in a fund that will earn interest at a specified rate, compounded annually, in order to make possible the withdrawal of certain equal sums annually over a specified period starting 1 year from date of deposit

4. The amount of interest that will accumulate on a single deposit by the end of a specified period (interest compounded semiannually)

5. The amount that if paid now would settle a debt of larger amount due at a specified future date

Part b. The following tables of values at 10% interest may be used as needed to answer the questions in this part of the problem.

 1. Your client will make annual payments of $2,500 into a fund at the close of each year. She has asked you how many $2,500 annual payments will be required to bring the fund to $22,500 assuming that the fund earns interest at 10% compounded annually. Compute the total number of full payments of $2,500 required and the amount of the final payment if it does not require the entire $2,500. Carefully label all computations supporting your answer.

2. Your client wishes to provide for the payment of an obligation of $200,000 due on July 1, 2023. He plans to deposit $20,000 in a special fund each July 1 for 7 years starting July 1, 2017. He wishes to make an initial deposit on July 1, 2016, of an amount that, with its accumulated interest, will bring the fund up to $200,000 at the maturity of the obligation. He expects that the fund will earn interest at the rate of 10% compounded annually. Compute the amount to be deposited July 1, 2016. Carefully label all computations supporting your answer.

Periods 0123 0 Table A 1.0000 0.9804 0.9612 Table B Table C 1.0000 1.0200 1.0200 2.0604 1.0404 3.1216 Table D 1.0000 0.4950 0.3268 Table E 0.9804 1.9416 2.8839