Reference no: EM133044443

Question - Present and Future Values

Q1. A teenager has decided to open a savings account to save up for a new car. He decides to deposit $3,000 in the savings account that was yielding a 5% interest. What is the value of this $3,000 deposited annually for 5 years in an account which yields 5% interest compounded annually?

Q2. A couple is wanting to purchase a home for $65,000. They receive an approval from a bank for a 15 year loan at a 3.5% interest rate. If the base payment was made each month for the 15 years, how much would each monthly payment be?

Q3. John Doe has won a state lottery and is able to take the payment of $100,000 on the spot with an earning rate of 4% or take 1 payment of $110,000 one year from now.

Q4. Matt has started up a savings account with $200. He wants to know how much that will grow to in 5 years. His account earns .5% interest every year. How much money will be in his account after 5 years?