Question 1

Your client plans to invest $2,000 at the end of each year. The rate of return on the investment is 7.5% compounded annually. What will be the value of the investment at the end of 12 years? (Taken from CIFP course materials.)

Accepted Answer

The answer of Your client plans to invest $2,000 at...

Question 2

Your client has systematically invested $1,000 at the end of each half-year for the past 17 years. The invested funds have earned 6.4% compounded semi-annually. What is the value of your client's investments today? (Taken from CIFP course materials.)

Accepted Answer

The answer of Your client has systematically invested $1,000 at...

Question 3

Determine the present value of the ordinary annuity:

Accepted Answer

The answer of Determine the present value of the ordinary...

Question 4

Dave Bidini has saved $20,000 for a down payment on a home and plans to save another $5,000 at the end of each year for the next five years. He expects to earn 7.25% compounded annually on his savings. How much will he have in five years' time? (Taken from CIFP course materials.)

Accepted Answer

The answer of Dave Bidini has saved $20,000 for a...

Question 5

Calculate the future value of investments consisting of payments of $800 at the end of each calendar quarter for seven years. The rate of interest earned will be 7% compounded quarterly for the first 30 months and 6% compounded semi-annually for the remainder of the annuity's term.

Accepted Answer

The answer of Calculate the future value of investments consisting...

Question 6

Your client is scheduled to receive $2,000 at the end of each year for the next 10 years. If money is currently worth 7% compounded annually, what is the present value of the annuity? (Taken from CIFP course materials.).

Accepted Answer

The answer of Your client is scheduled to receive $2,000...

Question 7

How much larger will the value of an RRSP be at the end of 20 years if the contributor makes month-end contributions of $500 instead of year-end contributions of $6,000? In both cases the RRSP earns 4.5% compounded semi-annually.

Accepted Answer

The answer of How much larger will the value of...

Question 8

Determine the future value:

Accepted Answer

The answer of Determine the future value:
...

Question 9

Classify the type of annuity described in the following scenario.
A student loan carrying interest of 2.5%, compounded quarterly is repaid with payments of $1000 at the end of every three months.

Accepted Answer

The answer of Classify the type of annuity described in...

Question 10

An annuity consists of payments of $700 made at the beginning of every quarter for 5 years. If the annuity earns 8% compounded semiannually, calculate present value.

Accepted Answer

The answer of An annuity consists of payments of $700...

Question 11

An annuity consists of payments of $450 made at the beginning of every month for 5 years. If the annuity earns 6% compounded semiannually, calculate present value.

Accepted Answer

The answer of An annuity consists of payments of $450...

Question 12

Suppose Evan contributes $2,000 to his RRSP at the end of every quarter for the next 15 years and then contributes $1,000 at each month's end for the subsequent 10 years. How much will he have in his RRSP at the end of the 25 years? Assume that the RRSP earns 6% compounded semi-annually.

Accepted Answer

The answer of Suppose Evan contributes $2,000 to his RRSP...

Question 13

Determine the present value of the ordinary annuity:

Accepted Answer

The answer of Determine the present value of the ordinary...

Question 14

Classify the type of annuity described in the following scenario.
An investor deposits $600 at the beginning of every month into an investment earning 7% compounded quarterly.

Accepted Answer

The answer of Classify the type of annuity described in...

Question 15

Assume that your client invests $1,000 at the end of each of the next three years. The investments earn 8% compounded annually. What is the future value at the end of the three years? (Taken from CIFP course materials.)

Accepted Answer

The answer of Assume that your client invests $1,000 at...

Question 16

Determine the future value:

Accepted Answer

The answer of Determine the future value:
...

Question 17

Classify the type of annuity described in the following scenario.
A mortgage carrying an interest rate of 3.75% compounded semiannually will be repaid over 25 years with payments of $1575.00 at the end of every month.

Accepted Answer

The answer of Classify the type of annuity described in...

Question 18

Kingston Engineering Services (KES) acquired a backhoe machine under a capital lease agreement. KES pays the lessor $2700.00 at the beginning of every three months for 7 years. If KES can obtain seven-year financing at 6% compounded quarterly, what long term liability will initially be recorded?

Accepted Answer

The answer of Kingston Engineering Services (KES) acquired a backhoe...

Question 19

Determine the future value:

Accepted Answer

The answer of Determine the future value:
...

Question 20

Determine the future value

Accepted Answer

The answer of Determine the future value
...

Quiz 10: Annuities: Future Value and Present Value

Your client plans to invest $2,000 at the end of each year. The rate of return on the investment is 7.5% compounded annually. What will be the value of the investment at the end of 12 years? (Taken from CIFP course materials.)

Your client has systematically invested $1,000 at the end of each half-year for the past 17 years. The invested funds have earned 6.4% compounded semi-annually. What is the value of your client's investments today? (Taken from CIFP course materials.)

Determine the present value of the ordinary annuity:

Dave Bidini has saved $20,000 for a down payment on a home and plans to save another $5,000 at the end of each year for the next five years. He expects to earn 7.25% compounded annually on his savings. How much will he have in five years' time? (Taken from CIFP course materials.)

Calculate the future value of investments consisting of payments of $800 at the end of each calendar quarter for seven years. The rate of interest earned will be 7% compounded quarterly for the first 30 months and 6% compounded semi-annually for the remainder of the annuity's term.

Your client is scheduled to receive $2,000 at the end of each year for the next 10 years. If money is currently worth 7% compounded annually, what is the present value of the annuity? (Taken from CIFP course materials.).

How much larger will the value of an RRSP be at the end of 20 years if the contributor makes month-end contributions of $500 instead of year-end contributions of $6,000? In both cases the RRSP earns 4.5% compounded semi-annually.

Determine the future value:

Classify the type of annuity described in the following scenario. A student loan carrying interest of 2.5%, compounded quarterly is repaid with payments of $1000 at the end of every three months.

An annuity consists of payments of $700 made at the beginning of every quarter for 5 years. If the annuity earns 8% compounded semiannually, calculate present value.

An annuity consists of payments of $450 made at the beginning of every month for 5 years. If the annuity earns 6% compounded semiannually, calculate present value.

Suppose Evan contributes $2,000 to his RRSP at the end of every quarter for the next 15 years and then contributes $1,000 at each month's end for the subsequent 10 years. How much will he have in his RRSP at the end of the 25 years? Assume that the RRSP earns 6% compounded semi-annually.

Determine the present value of the ordinary annuity:

Classify the type of annuity described in the following scenario. An investor deposits $600 at the beginning of every month into an investment earning 7% compounded quarterly.

Assume that your client invests $1,000 at the end of each of the next three years. The investments earn 8% compounded annually. What is the future value at the end of the three years? (Taken from CIFP course materials.)

Determine the future value:

Classify the type of annuity described in the following scenario. A mortgage carrying an interest rate of 3.75% compounded semiannually will be repaid over 25 years with payments of $1575.00 at the end of every month.

Kingston Engineering Services (KES) acquired a backhoe machine under a capital lease agreement. KES pays the lessor $2700.00 at the beginning of every three months for 7 years. If KES can obtain seven-year financing at 6% compounded quarterly, what long term liability will initially be recorded?

Determine the future value:

Determine the future value