Question 1

What is the present value of monthly payments of $1000 for 5 years followed by monthly payments of $500 for 10 years (first payment one month from now)if j12 = 4.8%?

Accepted Answer

A) $89,485.08 
B) $90,692.96 
C) $100,826.85 
D) $115,238.16 
A) $89,485.08 
B) $90,692.96 
C) $100,826.85 
D) $115,238.16

Question 2

You are given S = accumulated value of n payments of $1 at the time of the nth payment.Which of the following will give the correct result for the accumulated value of n+ 1 payments of $1,one period after the (n+ 1)th payment?

Accepted Answer

A) [S (1 + i )+ 1](1 + i 
B) [S + 1](1 + i ) 
C) S (1 + i )2 + 1 
D) S (1 + i)+ 1 
A) [S (1 + i )+ 1](1 + i 
B) [S + 1](1 + i ) 
C) S (1 + i )2 + 1 
D) S (1 + i)+ 1

Question 3

Monthly deposits of $800 are made into a fund starting today,April 14,2006 and continuing until July 14,2008.The fund earns j12 = 6%.What is the accumulated value of these deposits on July 14,2008?

Accepted Answer

A) $23,099.52 
B) $23,179.62 
C) $23,979.62 
D) $24,064.30 
A) $23,099.52 
B) $23,179.62 
C) $23,979.62 
D) $24,064.30

Question 4

You begin making monthly deposits of $400 on June 3,2007 in a fund earning j12 = 9%.How much do you have in the fund immediately after the deposit on October 3,2010?

Accepted Answer

A) $19,661.32 
B) $19,117.93 
C) $18,578.59 
D) $14,073.23 
A) $19,661.32 
B) $19,117.93 
C) $18,578.59 
D) $14,073.23

Question 5

A $1000 loan is being paid off with annual payments of $100 at the end of each year for as long as necessary,with the final $100 payment increased by a balloon payment.If j1 = 3.5%,what is the size of the balloon payment?

Accepted Answer

A) $30.27 
B) $33.67 
C) $50.87 
D) $52.66 
A) $30.27 
B) $33.67 
C) $50.87 
D) $52.66

Question 6

You deposit $100 at the end of every month for 7 years.At the end of 7 years you wish to have accumulated $12,600.Using linear interpolation,what nominal rate of interest,j12,is required?

Accepted Answer

A) 11.06% 
B) 11.15% 
C) 11.90% 
D) 11.94% 
A) 11.06% 
B) 11.15% 
C) 11.90% 
D) 11.94%

Question 7

Charles invests $500 on his birthday from age 18 to age 29 (inclusive).If his deposits earn j1 = 9%,how much will he have on his 65th birthday? (answer to nearest dollar)

Accepted Answer

A) $205,576 
B) $224,078 
C) $244,245 
D) $266,227 
A) $205,576 
B) $224,078 
C) $244,245 
D) $266,227

What is the present value of monthly payments of $1000 for 5 years followed by monthly payments of $500 for 10 years (first payment one month from now)if j₁₂ = 4.8%?

You are given S = accumulated value of n payments of $1 at the time of the n^th payment.Which of the following will give the correct result for the accumulated value of n+ 1 payments of $1,one period after the (n+ 1)^th payment?

Monthly deposits of $800 are made into a fund starting today,April 14,2006 and continuing until July 14,2008.The fund earns j₁₂ = 6%.What is the accumulated value of these deposits on July 14,2008?

You begin making monthly deposits of $400 on June 3,2007 in a fund earning j₁₂ = 9%.How much do you have in the fund immediately after the deposit on October 3,2010?

A $1000 loan is being paid off with annual payments of $100 at the end of each year for as long as necessary,with the final $100 payment increased by a balloon payment.If j₁ = 3.5%,what is the size of the balloon payment?

You deposit $100 at the end of every month for 7 years.At the end of 7 years you wish to have accumulated $12,600.Using linear interpolation,what nominal rate of interest,j₁₂,is required?

Charles invests $500 on his birthday from age 18 to age 29 (inclusive).If his deposits earn j₁ = 9%,how much will he have on his 65^th birthday? (answer to nearest dollar)

Simple Interest and Simple Discount

Compound Interest

General and Other Annuities

Repayment of Debts

Bonds

Business Decisions, Capital Budgeting and Depreciation

Contingent Payments

Filters

Exam 3: Simple Annuities