1. What is the accumulated sum of the following stream of payments? $2,198 every

Question

1. What is the accumulated sum of the following stream of payments?
$2,198 every year at the beginning of the year for 12 years, at 7.92 percent, compounded annually.
Round the answer to two decimal places.

2.You have accumulated some money for your retirement. You are going to withdraw $54,281 every year at the beginning of the year for the next 29 years starting today. How much money have you accumulated for your retirement? Your account pays you 4.20 percent per year, compounded annually. To answer this question, you have to find the present value of these cash flows.
Round the asnwer to two decimal places.

3. You plan to buy a house in 6 years. You want to save money for a down payment on the new house. You are able to place $417 every month at the end of the month into a savings account at an annual rate of 4.78 percent, compounded monthly. How much money will be in the account after you made the last payment?
Round the answer to two decimal places?

Explanation / Answer

Excel formulae used

fv(rate percent, number of time periods, installment amount,, 1-begining of time period/ 0 - end of time period)

pv(rate percent,number of time periods, installment amount,, 1-begining of time period/ 0 - end of time period)

1. $44802.31=FV(7.92,12,-2198,,1)

2. $938270.07=PV(4.2,29,-54281,,1)

3. $34692.90=FV(0.398,72,-417,,0) rate percent = 4.78/12, time periods = 12*6 = 72

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