Exam 11: Ordinary Simple Annuities

Siri plans to retire now and would like to receive $10 000.00 per month for twenty years starting at the end of the first month after her retirement. Calculate the amount he must invest now if interest is 4.9% compounded monthly.

Mr. and Mrs. Fox have each contributed $1825.00 per year for the last eight years into RRSP accounts earning 6.93% compounded annually. Suppose they leave their accumulated contributions for another five years in the RRSP at the same rate of interest. a)How much will Mr. and Mrs. Fox have in total in their RRSP accounts? b)How much did the Fox's contribute? c)How much will be interest?

The term of annuity is

What payment made at the end of each month for 13 years will amount to $17 520.00 at 9.66% compounded monthly?

You want to save $710 per quarter for 15.5 years towards the purchase of a motor home. You think that you can earn 6.56% compounded quarterly for this period of time. If your first deposit is in 3 months, what is the most expensive motor home that you will be able to purchase?

What payment is required at the end of each month for 3 years to repay a loan of $8000.00 at 6.4% compounded monthly?

A loan of $19 850.00 is to be repaid in quarterly payments of $620.00. How many payments are required to repay the loan at 6.5% compounded quarterly?

How many quarterly payments will it take for $400.00 deposited at the end of each quarter to amount to $11 453.40 at 6% compounded quarterly?

How much will it cost Shaun to purchase a two-level retirement annuity that will pay $6000 at the end of each month for the first 10 years, and $9000 per month for the next 15 years? The payments represent a rate of return to Shaun of 6% compounded monthly.

What is the discounted value of deposits of $150.00 made at the end of each month for fourteen years if interest is 4.5% compounded monthly?

What is the future value of an annuity with monthly deposits of $277 for a period of 11.5 years at an interest rate of 7.44% compounded monthly? The deposits are made at the end of the month.

Bonny converted an RRSP balance of $176 875.67 into an RRIF that will pay her $2720.00 at the end of every month for 8 years. What is the nominal rate of interest?

Sam got a job at the Brick. He plans to save $500 every month for 3 years to buy a car. The savings account earns 2.25% compounded monthly. If he puts the money in his savings account at the end of each month, what will be the present value of the balance in the account at the end of the three-year term?

Yankee Construction agreed to lease payments of $762.79 on construction equipment to be made at the end of each month for six years. Financing is at 15% compounded monthly. a)What is the value of the original lease contract? b)If, due to delays, the first eight payments were deferred, how much money would be needed after nine months to bring the lease payments up to date? c)How much money would be required to pay off the lease after nine months? d)If the lease were paid off after nine months, what would the total interest be? e)How much of the total interest would be due to deferring the first eight payments?

Suppose $726.56 is deposited at the end of every six months into an account earning 6.45% compounded semi-annually. If the balance in the account four years after the last deposit is to be $31 300.00, how many deposits are needed?

Jamal plans to retire in 17 years. He is saving $2000 every month in a retirement savings account paying him a long-term interest of 9% compounded monthly. What will be the size of his payments per month from the ordinary simple annuity for 20 years following his retirement?

Annette bought a vacation property for $22 900.00 down and quarterly mortgage payments of $1224.51 at the end of each quarter for six years. Interest is 8.4% compounded quarterly. a)What was the purchase price of the property? b)How much interest will Annette pay?

What deposit made at the end of each quarter will accumulate to $20 000.00 in four years at 4% compounded quarterly?

What nominal rate of interest is earned by monthly deposits of $560.00 made for 6 years if the balance just after the last deposit is $52 700.00?

A loan was repaid in 7.25 years by end-of month monthly payments of $472. If interest was 6.12% compounded monthly, how much interest was paid?