Question 1

An annuity with periodic payments made at the end of each payment period is called:

Accepted Answer

A) ordinary 
B) simple 
C) annuity due 
D) general 
E) none of the above 
A) ordinary 
B) simple 
C) annuity due 
D) general 
E) none of the above

Question 2

Planning for their child's college education,David and Carol Roberts opened an account paying 6.36% compounded monthly.If ordinary annuity payments of $700.00 per month are to be paid out of the account for three years starting seven years from now,how much did the Roberts' deposit?

Accepted Answer

Balance in account 7 years fro

Question 3

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

Accepted Answer

FV = 20 000.00; n = 4(4)= 16;

Question 4

A car was purchased for $4500.00 down and payments of $375.00 at the end of each month for 5 years.Interest is 9.72% compounded monthly.
a)What was the purchase price of the car?
b)How much will be the amount of interest paid?

Accepted Answer

a)PV_n = 375.00 @#IMG-DLM& = 375.00(47.371

Question 5

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?

Accepted Answer

At the moment of last deposit: FV = 3130

Question 6

Don has just turned 43 and has accumulated $34 500 in his RRSP.He makes month-end contributions of $300 to the plan and intends to do so until he retires at the age of 60.The RRSP will be allowed to continue to accumulate until he reaches the age of 65.If the RRSP earn 8% compounded monthly for the next 22 years,what amount will his RRSP contain,when he reaches age 65?

Accepted Answer

A) $129 539.17 
B) $192 993.38 
C) $227 493.81 
D) $199 361.27 
E) $392 354.65 
A) $129 539.17 
B) $192 993.38 
C) $227 493.81 
D) $199 361.27 
E) $392 354.65

Question 7

The Savoias bought an investment property valued at $160 000.00 by paying 25% down and mortgaging the balance over 25 years through equal monthly payments at 6% compounded monthly.What was the size of the monthly payments?

Accepted Answer

The mortgaged balance is 160 0

Question 8

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.

Accepted Answer

A) $1 066 532 
B) $586 201 
C) $540 441 
D) $1 126 642 
E) $2 193 174 
A) $1 066 532 
B) $586 201 
C) $540 441 
D) $1 126 642 
E) $2 193 174

Question 9

The Olfert Contractors,Inc.,are saving $958.00 every month in order to purchase a new paving machine in twelve years.Their savings certificates pay 6% p.a.compounded monthly.How much of the maturity value will be interest?

Accepted Answer

FV_n = 958.0

Question 10

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?

Accepted Answer

A) $44 020.00 
B) $75 999.79 
C) $75 399.79 
D) $27 501.82 
E) $79 999.79 
A) $44 020.00 
B) $75 999.79 
C) $75 399.79 
D) $27 501.82 
E) $79 999.79

Question 11

A loan of $20 000 is paid over 5 years by monthly payments of $388.What is the nominal rate of interest on the loan?

Accepted Answer

A) 7.5% 
B) 0.625% 
C) 0.089% 
D) 6.14% 
E) 2.47% 
A) 7.5% 
B) 0.625% 
C) 0.089% 
D) 6.14% 
E) 2.47%

Question 12

An annuity due is an annuity for which

Accepted Answer

A) the payments are made at the beginning of each payment period 
B) the payments are made at the end of each payment period 
C) the payment period is not the same as the conversion period 
D) the payments are made to repay a loan 
E) the payments continue forever 
A) the payments are made at the beginning of each payment period 
B) the payments are made at the end of each payment period 
C) the payment period is not the same as the conversion period 
D) the payments are made to repay a loan 
E) the payments continue forever

Question 13

Jason deposited $100.00 at the end of each month for five years into an account paying 6% compounded monthly.What will be the balance in the account at the end of the five-year term?

Accepted Answer

PMT = 100.00; n = 5(12)= 60; i

Question 14

You have inherited some money and you want to set some of that money aside for ten years.After ten years,you would like to receive $7600.00 at the end of each 6 months for nine years.If the interest is 6.5% compounded semi-annually,how much of your inheritance must you set aside?

Accepted Answer

PV_n = 7600.00 @#IMG-DLM& = 7600.00(13.467

Question 15

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?

Accepted Answer

a)FV_n = 3650.00 @#IMG-DLM& = 3650.00(10.2

Question 16

Find the amount to which semi-annual deposits of $200.00 will grow in four years at 6.6% p.a.compounded semi-annually.

Accepted Answer

FV_n = 200.0

Question 17

Note: The calculations for this question were done using Excel's RATE function.
What nominal rate of interest is paid on quarterly RRSP contributions of $573.00 made for 17.75 years if the balance just after the last contribution is $106 000.00?

Accepted Answer

@#IMG-DLM& Pmt -573.00 FV 1060

Question 18

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?

Accepted Answer

FV = 11453.40; PMT = 400.00; i

Question 19

Planning for their child's college education,Sean and Jessica opened an account paying 8.00% compounded yearly.If ordinary annuity payments of $15 000.00 per year are to be paid out of the account for three years starting sixteen years from now,how much did the couple deposit?

Accepted Answer

Balance in account 15 years fr

Question 20

What is the size of end-of-month monthly deposits which will accumulate to $122 200.00 after six years if interest is 5.7% compounded monthly?

Accepted Answer

122200.00 = PMT @#IMG-DLM& 122200.00 = P

An annuity with periodic payments made at the end of each payment period is called:

Planning for their child's college education,David and Carol Roberts opened an account paying 6.36% compounded monthly.If ordinary annuity payments of $700.00 per month are to be paid out of the account for three years starting seven years from now,how much did the Roberts' deposit?

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

A car was purchased for $4500.00 down and payments of $375.00 at the end of each month for 5 years.Interest is 9.72% compounded monthly. a)What was the purchase price of the car? b)How much will be the amount of interest paid?

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?

The Savoias bought an investment property valued at $160 000.00 by paying 25% down and mortgaging the balance over 25 years through equal monthly payments at 6% compounded monthly.What was the size of the monthly payments?

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.

The Olfert Contractors,Inc.,are saving $958.00 every month in order to purchase a new paving machine in twelve years.Their savings certificates pay 6% p.a.compounded monthly.How much of the maturity value will be interest?

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?

A loan of $20 000 is paid over 5 years by monthly payments of $388.What is the nominal rate of interest on the loan?

An annuity due is an annuity for which

Jason deposited $100.00 at the end of each month for five years into an account paying 6% compounded monthly.What will be the balance in the account at the end of the five-year term?

You have inherited some money and you want to set some of that money aside for ten years.After ten years,you would like to receive $7600.00 at the end of each 6 months for nine years.If the interest is 6.5% compounded semi-annually,how much of your inheritance must you set aside?

Find the amount to which semi-annual deposits of $200.00 will grow in four years at 6.6% p.a.compounded semi-annually.

Note: The calculations for this question were done using Excel's RATE function. What nominal rate of interest is paid on quarterly RRSP contributions of $573.00 made for 17.75 years if the balance just after the last contribution is $106 000.00?

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?

Planning for their child's college education,Sean and Jessica opened an account paying 8.00% compounded yearly.If ordinary annuity payments of $15 000.00 per year are to be paid out of the account for three years starting sixteen years from now,how much did the couple deposit?

What is the size of end-of-month monthly deposits which will accumulate to $122 200.00 after six years if interest is 5.7% compounded monthly?

Review of Arithmetic

Review of Basic Algebra

Ratio,proportion,and Percent

Linear Systems

Cost-Volume-Profit Analysis and Break-Even

Trade Discounts, cash Discounts, markup, and Markdown

Simple Interest

Simple Interest Applications

Compound Interestfuture Value and Present Value

Compound Interestfurther Topics

Ordinary General Annuities

Annuities Due, deferred Annuities, and Perpetuities

Amortization of Loans,including Residential Mortgages

Bond Valuation and Sinking Funds

Investment Decision Applications

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Exam 11: Ordinary Simple Annuities

An annuity with periodic payments made at the end of each payment period is called:

Planning for their child's college education,David and Carol Roberts opened an account paying 6.36% compounded monthly.If ordinary annuity payments of $700.00 per month are to be paid out of the account for three years starting seven years from now,how much did the Roberts' deposit?

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

A car was purchased for $4500.00 down and payments of $375.00 at the end of each month for 5 years.Interest is 9.72% compounded monthly. a)What was the purchase price of the car? b)How much will be the amount of interest paid?

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?

The Savoias bought an investment property valued at $160 000.00 by paying 25% down and mortgaging the balance over 25 years through equal monthly payments at 6% compounded monthly.What was the size of the monthly payments?

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.

The Olfert Contractors,Inc.,are saving $958.00 every month in order to purchase a new paving machine in twelve years.Their savings certificates pay 6% p.a.compounded monthly.How much of the maturity value will be interest?

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?

A loan of $20 000 is paid over 5 years by monthly payments of $388.What is the nominal rate of interest on the loan?

An annuity due is an annuity for which

Jason deposited $100.00 at the end of each month for five years into an account paying 6% compounded monthly.What will be the balance in the account at the end of the five-year term?

You have inherited some money and you want to set some of that money aside for ten years.After ten years,you would like to receive $7600.00 at the end of each 6 months for nine years.If the interest is 6.5% compounded semi-annually,how much of your inheritance must you set aside?

Find the amount to which semi-annual deposits of $200.00 will grow in four years at 6.6% p.a.compounded semi-annually.

Note: The calculations for this question were done using Excel's RATE function. What nominal rate of interest is paid on quarterly RRSP contributions of $573.00 made for 17.75 years if the balance just after the last contribution is $106 000.00?

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?

Planning for their child's college education,Sean and Jessica opened an account paying 8.00% compounded yearly.If ordinary annuity payments of $15 000.00 per year are to be paid out of the account for three years starting sixteen years from now,how much did the couple deposit?

What is the size of end-of-month monthly deposits which will accumulate to $122 200.00 after six years if interest is 5.7% compounded monthly?

Review of Arithmetic

Review of Basic Algebra

Ratio,proportion,and Percent

Linear Systems

Cost-Volume-Profit Analysis and Break-Even

Trade Discounts, cash Discounts, markup, and Markdown

Simple Interest

Simple Interest Applications

Compound Interestfuture Value and Present Value

Compound Interestfurther Topics

Ordinary General Annuities

Annuities Due, deferred Annuities, and Perpetuities

Amortization of Loans,including Residential Mortgages

Bond Valuation and Sinking Funds

Investment Decision Applications

Filters