Review Problems Use future and present values of one dollar and ann ing problems

Question

Review Problems Use future and present values of one dollar and ann ing problems. annuities to solve the fo Find the future values of the following ordinary annuities a. $500 per year for 10 years at 10% b. $500 per year for 4 years at 096 e Jones, a writer, wants to establish a retirement accourt ount where he can earns 6% fix per deposit $1,000 per year for 30 years compounded. If he e year on his investment, how much is going to have when he years? A finance company offers to sell you a note for $15,662.45 th $2,440.50 per year for 10 years. If you decide to purchase the rate of interest will you be earning? at will pay note, what John has a choice of investing $25,000 in a savings account that pays 8% compounded semiannually or investing in another business venture that will pay $40,000 after 7 years. Which is a better investment for John? Find an amount of an annuity for 10 years with a payment of $5,000 per year at an annual percentage rate of 10%, then solve the problem for an annuity due. effective rate that corresponds to a nominal rate of S quarterly 0 An annuity consists of equal payments at the end of each quarter for 5 years to be purchased for $10,000. If the interest rate is 8% compounded quarterly, how much is each payment?

Explanation / Answer

Please raise additional questions as per chegg policy for remaining part.

Question Answer Explanation 1 a) $7,968.71 =FV(10%,10,-500) 1 b) $2,000.00 =FV(0%,4,-500) 2) $79,058.19 =FV(6%,30,-1000) 3) 9% 2440.50=pmt(x%,10,-15662.45). Solving for x will give x=9% 4) First option is better =25000*(1+8%)^7=$42,846 which is greater then $40,000

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