Question 1

At the beginning of each period for 9 years, Scott Sullivan invested $900 at 4% interest compounded semiannually. What is the value of this annuity due?

Accepted Answer

The answer of At the beginning of each period for...

Question 2

Find the value of an investment after three years on $15,000 made quarterly at 8% for (A)an ordinary annuity and (B)an annuity due.

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The answer of Find the value of an investment after...

Question 3

Abby's Uncle Howard has promised her a gift upon graduation from high school of $2,000 or $200 every quarter for the next three years. If the money could be invested at 8%, which offer should Abby choose? (Show your calculations.)

Accepted Answer

The answer of Abby's Uncle Howard has promised her a...

Question 4

Block Associates borrowed $75,000. The company plans to set up a sinking fund that will repay the loan after 16 years. Assume an 8% interest rate compounded semiannually. What must Block Associates pay into the fund each period?

Accepted Answer

The answer of Block Associates borrowed $75,000. The company plans...

Question 5

How much will the Apple Corporation have to set aside each year to have $60,000 ten years from now? Assume interest is at 10% compounded semiannually.

Accepted Answer

The answer of How much will the Apple Corporation have...

Question 6

Gail Korosa decided that in six years she will leave her job in publishing and retire to Arizona. What amount should Gail invest today so that she will be able to withdraw $50,000 at the end of each year for 30 years after she retires? Assume she can invest money at 5% interest compounded annually.

Accepted Answer

The answer of Gail Korosa decided that in six years...

Question 7

Roger Fox made deposits of $900 semiannually to Reed Bank at the end of each period, which pays 6% interest compounded semiannually. After seven years Roger made no more deposits. What will be the balance in the account eight years after the last deposit?

Accepted Answer

The answer of Roger Fox made deposits of $900 semiannually...

Question 8

Find the value of an investment after six years for a $7,000 annuity due at 8% compounded annually.

Accepted Answer

The answer of Find the value of an investment after...

Question 9

Art Newner wants to know how much he will have to invest today in order to receive an annuity of $8,000 for three years if interest is earned at 10% annually. He will make all his withdrawals at the end of each year. How much should Art invest?

Accepted Answer

The answer of Art Newner wants to know how much...

Question 10

Mike O'Brien plans to deposit $1,250 at the end of every six months for the next eight years at 6% interest compounded semiannually. What is the value of Mike's annuity at the end of eight years?

Accepted Answer

The answer of Mike O'Brien plans to deposit $1,250 at...

Question 11

Find the value of an investment after four years on $6,000 made quarterly at 8% for (A)an ordinary annuity and (B)an annuity due.

Accepted Answer

The answer of Find the value of an investment after...

Question 12

Jim Hunter is ready to retire to Florida. What amount should Jim invest today so that he will be able to withdraw $25,000 at the end of each year for 30 years after he retires? Assume he can invest money at 9% interest compounded annually.

Accepted Answer

The answer of Jim Hunter is ready to retire to...

Question 13

What must Bill McGuire invest today to receive an annuity of $9,000 for four years semiannually at an 8% annual rate? All withdrawals will be made at the end of each period.

Accepted Answer

The answer of What must Bill McGuire invest today to...

Question 14

In 10 years, Longin Company will have to repay a $60,000 loan. Assume an 8% interest rate compounded quarterly. How much must Longin pay each period to have the $60,000 at the end of 10 years? Verify your result.

Accepted Answer

Verified by taking $996 and using the annuity table.

Question 15

Find the value of an investment after four years for a $7,000 ordinary annuity at 10% compounded annually.

Accepted Answer

The answer of Find the value of an investment after...

Question 16

Rita Heckt wants to receive $4,200 each year for 15 years. How much must Rita invest today at 5% compounded annually?

Accepted Answer

The answer of Rita Heckt wants to receive $4,200 each...

Question 17

Find the value of an investment after five years for a $6,000 ordinary annuity at 8% compounded annually.

Accepted Answer

The answer of Find the value of an investment after...

Question 18

Alice Wolf wants to know how much she will have to invest today in order to receive an annuity of $6,000 for four years if interest is earned at 10% annually. She will make all her withdrawals at the end of each year. How much should Alice invest?

Accepted Answer

The answer of Alice Wolf wants to know how much...

Question 19

Angel Rowe wants to receive $7,500 each year for the next 25 years. Assume a 5% interest rate compounded annually. How much should Angel invest today?

Accepted Answer

The answer of Angel Rowe wants to receive $7,500 each...

Question 20

Find the value of an investment after four years for a $7,000 annuity due at 10% compounded annually.

Accepted Answer

The answer of Find the value of an investment after...

Quiz 13: Annuities and Sinking Funds

At the beginning of each period for 9 years, Scott Sullivan invested $900 at 4% interest compounded semiannually. What is the value of this annuity due?

Find the value of an investment after three years on $15,000 made quarterly at 8% for (A)an ordinary annuity and (B)an annuity due.

Abby's Uncle Howard has promised her a gift upon graduation from high school of $2,000 or $200 every quarter for the next three years. If the money could be invested at 8%, which offer should Abby choose? (Show your calculations.)

Block Associates borrowed $75,000. The company plans to set up a sinking fund that will repay the loan after 16 years. Assume an 8% interest rate compounded semiannually. What must Block Associates pay into the fund each period?

How much will the Apple Corporation have to set aside each year to have $60,000 ten years from now? Assume interest is at 10% compounded semiannually.

Gail Korosa decided that in six years she will leave her job in publishing and retire to Arizona. What amount should Gail invest today so that she will be able to withdraw $50,000 at the end of each year for 30 years after she retires? Assume she can invest money at 5% interest compounded annually.

Roger Fox made deposits of $900 semiannually to Reed Bank at the end of each period, which pays 6% interest compounded semiannually. After seven years Roger made no more deposits. What will be the balance in the account eight years after the last deposit?

Find the value of an investment after six years for a $7,000 annuity due at 8% compounded annually.

Art Newner wants to know how much he will have to invest today in order to receive an annuity of $8,000 for three years if interest is earned at 10% annually. He will make all his withdrawals at the end of each year. How much should Art invest?

Mike O'Brien plans to deposit $1,250 at the end of every six months for the next eight years at 6% interest compounded semiannually. What is the value of Mike's annuity at the end of eight years?

Find the value of an investment after four years on $6,000 made quarterly at 8% for (A)an ordinary annuity and (B)an annuity due.

Jim Hunter is ready to retire to Florida. What amount should Jim invest today so that he will be able to withdraw $25,000 at the end of each year for 30 years after he retires? Assume he can invest money at 9% interest compounded annually.

What must Bill McGuire invest today to receive an annuity of $9,000 for four years semiannually at an 8% annual rate? All withdrawals will be made at the end of each period.

In 10 years, Longin Company will have to repay a $60,000 loan. Assume an 8% interest rate compounded quarterly. How much must Longin pay each period to have the $60,000 at the end of 10 years? Verify your result.

Find the value of an investment after four years for a $7,000 ordinary annuity at 10% compounded annually.

Rita Heckt wants to receive $4,200 each year for 15 years. How much must Rita invest today at 5% compounded annually?

Find the value of an investment after five years for a $6,000 ordinary annuity at 8% compounded annually.

Alice Wolf wants to know how much she will have to invest today in order to receive an annuity of $6,000 for four years if interest is earned at 10% annually. She will make all her withdrawals at the end of each year. How much should Alice invest?

Angel Rowe wants to receive $7,500 each year for the next 25 years. Assume a 5% interest rate compounded annually. How much should Angel invest today?

Find the value of an investment after four years for a $7,000 annuity due at 10% compounded annually.