Exam 11: Ordinary Simple Annuities

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?

Find the present value of ordinary semi-annual payments of $810.00 for five years at 5.45% p.a.,compounded semi-annually.

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.

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?

Randy bought an annuity to pay him $2700.00 at the end of every six months for twenty years.How much of the total annuity payments is interest,if interest is 6.5% p.a.compounded semi-annually?

On his retirement,Louis received a lump sum of $800 000 from his employer.Taking advantage of existing tax legislation,he invested his money in an annuity that provides for payments of $60 000 at the end of every 3 months.If interest is 6.25% compounded quarterly,how long will the annuity exist?

Find the amount to which monthly deposits of $100.00 will grow in five years at 4.8% p.a.compounded monthly.

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?

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?

How many monthly payments will it take for $1000.00 deposited at the end of each month to amount to $50 000.00 at 9% compounded monthly?

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?

Nuclear power plants are required to have full decommissioning costs accumulated during the useful life of the plant.The new nuclear plant at Darlington is designed for 60 years of operational life starting in 2025.OPG plans to set aside $1 million per month in a sinking fund for the operational of the plant.What is the value of the value of this sinking fund at the end of the plant life,if OPG expects an average rate of return of 2.5% compounded monthly?

Compute the nominal annual rate of interest (compounded monthly)at which $200.00 deposited at the end of each month for ten years will amount to $30 000.00

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?

Calculate the accumulated value of monthly payments of $100.00 made at the end of each month for ten years just after the last payment has been made if interest is 12% p.a.compounded monthly.

Pat won a lottery with two options: $1 million per year,at the beginning of the year,for 25 years or a single cash price of $18 million.If low-risk investments can earn 2.5% compounded annually,which option should Pat choose and what is the advantage in terms of current economic value?

Calculate the accumulated value of quarterly payments of $100.00 made at the end of each quarter for ten years just after the last payment has been made if interest is 8% p.a.compounded quarterly.

Ali bought Kia Forte 5 from Durham Kia for $20 078.00 on finance agreement with BMO at 5.99% compounded monthly.Calculate the monthly payment on the loan,if the financing period is 60 months.

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 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?