What is the amount of the equal annual installments

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Reference no: EM13976307

1. Calculate the amount today that is equivalent to $150 at the end of year 1, $450 at the end of year 2, and $300 at the end of year 3, given a discount rate of 10%.

2. Suppose you put $100 into a savings account today, the account pays 8% compounded semi annually, and you withdraw $50 one year after your initial deposit. What would your ending balance be 20 years after the initial $100 deposit was made, assuming that you make no additional deposits?

3. Joan is saving to open her own dress shop in 10 years. She currently has $10,000. In addition, she plans to save $2,000 per year for the next 5 years and $3,000 per year for the following 5 years. How much will Joan have in 10 years if she earns a 10 % return on her savings?

4. You know you will need $25,000 at the end of 5 years. How much would you have to deposit annually, starting at the end of the first year, into an account earning 10% to accumulate the needed amount?

5. What is the amount of the equal annual installments for a 10-year, $10,000 loan with a 20% rate of interest?

6. Comet Powder Company has purchased a piece of equipment costing $100,000. It is expected to generate a 10-year stream of benefits amounting to $16,273 per year. Determine the rate of return Comet expects to earn from this equipment.

7. If an 8-year annuity due has a Future Value (FV) of $10,000 and the interest rate is 7%, what is the amount of each annuity payment? .

8. An annuity with $1,000 annual payments at the end of each year, with a 10% interest rate, is worth how much at the end of four years?

9. You want to purchase a boat that costs $40,000. You want to finance as much of the purchase as possible with a 5-year bank loan at 12% compounded monthly, but can only afford loan payments of $750 per month. How much will you need as a down payment to buy the boat? (Round to the nearest dollar)

10. What are the payments on a $12,500, four-year bank loan at 12% compounded monthly?

11. You have borrowed $180,000 to buy a new home. You plan to make monthly payments over a 25-year period. The bank has offered you a 10% interest rate compounded monthly. Calculate the total amount of interest you will pay the bank over the life of the loan.

Reference no: EM13976307

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