Exam 12: Ordinary General Annuities

If a loan was repaid by monthly payments of $9230.00 in 7.5 years at 6.15% compounded annually, how much interest was paid?

Conchita Martinez saves $17.25 at the end of each month and deposits the money in an account, paying 4.96% compounded quarterly. a) How much will she accumulate in 22 years? b) How much of the accumulated amount is interest?

A mortgage requires payments of $1000.00 at the end of every month for twenty-five years. If interest is 6% compounded semi-annually, calculate the principal of the loan.

Note: The calculations for this question were done using Excel's RATE function. A $160 000.00 mortgage with a 20-year term is repaid by making monthly payments of $1361.00. What is the rate of interest compounded semi-annually on the mortgage?

Momin plans to buy a house on cash instead of paying mortgage. He plans to set aside $14 400 at the end of each year for 15 years. He puts his savings in a Tax Free Savings Account (TFSA) and invests them in a high risk mutual fund, which has traditionally earned 12.2% annually. Money decreases in value by 2.5% per annum as well. How long will it take Momin to reach his target?

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 quarterly.

For their daughter's future education David and Bonnie set a fund in which they invest at the end of every six months. The first investment is $100 and they plan to increase their investments at a constant rate of 0.5%. If the fund earns 2 .4% compounded semi-annually, how much money will be in the fund in 16 years when their daughter goes to college?

A loan is repaid by making payments of $6000.00 at the end of every six months for twelve years. If interest on the loan is 8% compounded quarterly, what was the principal of the loan?

You make 4 semi-annual deposits starting at $350 and increasing at a constant rate of 2.14%. The interest rate is 5.12% compounded annually. How much has been deposited in total?

You lease a car for monthly payments of $610.23 at the end of each month for 54 months. There is a no security deposit sale going on. The interest rate on the lease is 3.9% compounded annually. The buy-out is $19552 at the end of the lease. How expensive is the vehicle?

Note: The calculations for this question were done using Excel's RATE function. What is the rate of interest compounded quarterly if a loan of $31 500.00 is repaid in seven years by payments of $2712.00 made at the end of every six months?

What sum of money can be withdrawn from a fund of $46 950.00 invested at 6.5% compounded semi-annually at the end of every three months for twelve years?

Calculate the nominal interest rate of interest compounded quarterly if a loan of 43 000.00 is repaid in seven years by payments of $4000.00 made at the end of every six months.

For how long will Harold have to make payments of $550.00 at the end of every three months to repay a loan of $16 900.00 if interest is 9% compounded monthly?

Mark deposits $900 at the end of each month in a savings account earning 4.5% quarterly. How soon can he buy his first car assuming that he needs $8 000 for a decent car.

A student bought a rental property for $40 000.00 down and monthly payments of $1000.00 for 5 years. What is the equivalent cash price if money is worth 5.75% compounded semi-annually?

If a loan was repaid by semi-annual payments of $4720.00 in 6.5 years at 8.24% compounded quarterly, how much interest was paid?

A 22-year mortgage is amortized by payments of $1761.50 made at the end of each month. If interest is 9.65% compounded semi-annually, what is the mortgage principal?

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 semi-annually. If he puts the money in his savings account at the end of each month, how much interest is included in the future value of the annuity?

Don turned 60 years old today and has retired from Hydro One. Current economic value of his pension is his significant asset. He will be receiving pension payments of $84 000 every year. Based on a 22-year life expectancy and money worth 8% compounded annually and money depreciating at 2% annually, calculate the current economic value of Don's pension.