Determine the annual payments

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Reference no: EM132059541

1. A loan of £5650 is to be paid using an annuity certain payable annually for 15 years. If the effective annual interest rate is fixed and equal to 7.5% per annum determine the annual payments.

2. An investor deposits f350 each year in arrear on the same date into an account which has an effective interest rate of 6.25% per annum for 25 years. Determine how much is in the account when the last payment is made. If this sum is the transferred to another account offering 7.5% interest per annum for 5 years how much has been accumulated at the end of this period?

3. A young lady decides to invest some of her earnings each month. She chooses an account paying

4.75% per annum and decides to make annual payments of £850 in arrear. If the account is to operate for 12 years how much will she have accumulated at the end of this time? If payments were made quaterly, how much extra will be in the account? 4. An annuity is to be purchased so that £360 is paid to an investor at the end ofeach year for 15 years. If the interest on the annuity is 7.25% determine the cost of the annuity.

5. If the rate of interest is l 1.5% per annum effective find the present value of an annuity of £600 per annum for 20 years payable: (i) annually in arrear (ii) monthly in arrear.

Reference no: EM132059541

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