Exam 11: Ordinary Simple Annuities

If a loan was repaid by ordinary monthly payments of $715.00 in seven years at 9.12%, compounded monthly, how much interest was paid?

A $15 000.00 loan requires payments at the end of each month for five years. If the interest rate on the loan is 12% compounded monthly, calculate the size of each payment.

An installment contract for the purchase of a car requires payments of $570.60 at the end of each month for the next three years. Suppose interest is 11.8% p.a. compounded monthly. a) What is the amount financed? b) How much is the interest cost?

Kam expects to retire in 22 years. Beginning one month after his retirement he would like to receive $590.00 per month for 25 years. How much must he deposit into a fund today to be able to do so if the rate of interest on the deposit is 6.12% compounded monthly?

You want to be able to travel and withdraw $3750 at the end of every month during your yearlong trip. During your trip your travel fund will earn 6.24% compounded monthly. What is the size of your travel fund if you want to be able to start your trip in 4 years and 7 months?

Jordan is considering building a nuclear power plant, which will be ready for production in 2030. The country's governing body is also considering a decommissioning liability law for the operator to put aside $1 million every month towards decommissioning cost, when the plant is producing electricity. During the 60 years of production life of the plant, the operator will put $1 million at the end of the month in a savings account, earning 7.25% compounded monthly. At the end of the production life of the plant, there are no more contributions and the money is expected to grow at the rate of 6% compounded quarterly for the next 30 years. What will be the value of the decommissioning fund in 2120?

Note: The calculations for this question were done using Excel's RATE function. A property worth $191 000.00 can be purchased for 15% down and quarterly mortgage payments of $1972.00 for 30 years. What effective rate of interest is charged?

You currently have $4541 saved towards the purchase of a home theatre system. You want to be able to buy a system for $6225 plus GST in 4 years. Your money is earning 4.84% compounded monthly. What is the size of your monthly deposit?

Janice plans to retire in 10 years and would like to receive $3000.00 per month for fifteen years starting at the end of the first month after her retirement. Calculate the amount she must invest now if interest is 7.5% compounded monthly.

Jane borrowed $20 000 to help finance her BBA at UOIT with no interest until she finishes her education. She starts a job with a local bank immediately after finishing her BBA and contracts to pay her loan in monthly payments of $300 each. If the payments are due at the end of each month and the interest is compounded 4% monthly, how long will Jane have to make monthly payments?

Find the amount to which monthly deposits of $100.00 will grow in five years at 4.8% p.a. 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 term of a mortgage of $235 000.00 repaid by monthly payments of $2475.00 if interest is 7.55% compounded monthly?

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 until retirement. The rate changes following the retirement. He wants $7000 per month paid to him for 20 years after the retirement. At what rate should his savings account pay him to fulfill his dream? (Use the Rate function in Excel)

In what period of time could you pay back a loan of $13 900.00 by making monthly payments of $296.00 if interest is 6.5% compounded monthly?

A man put aside $5710.00 at the end of every 3 months for seven years. How much will he have six years after the least deposit, if his account earned 5.6% p.a. compounded quarterly?

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

Calculate the present value of 120 payments of $50.00 made at the end of each of 120 consecutive months respectively if money is worth 12% compounded monthly.

$1000.00 is deposited at the end of every month into an account earning 6.00% compounded monthly. If the balance in the account five years after the last deposit is to be $50 000.00, how many deposits are needed?

Calculate the present value of five payments of $1500.00 made at the end of each of five consecutive years respectively if money is worth 6% compounded annually.