Question 1

Paul intends to retire in 15 years and would like to receive $8000.00 every 6 months for 20 years,starting on the date of his retirement.How much must he deposit in an account today if interest is 5% compounded semi-annually?

Accepted Answer

The answer of Paul intends to retire in 15 years...

Question 2

$6420.00 was invested at a fixed rate of 6.5% compounded semi-annually for 5 years.After 5 years,the fund was converted into an ordinary annuity paying $550.00 per month.If interest on the annuity was 6% compounded monthly,what was the term of the annuity?

Accepted Answer

The answer of $6420.00 was invested at a fixed rate...

Question 3

What is the accumulated value after 15 years of monthly deposits of $500.00 earning interest at 8% compounded semi-annually if the deposits are made
a)at the end of each month?
b)at the beginning of each month?

Accepted Answer

The answer of What is the accumulated value after 15...

Question 4

Mrs.Lavergne deposits $562.71 at the beginning of every three months.Starting three months after the last deposit,she intends to withdraw $587.00 every three months for 16 years.If interest is 8.14% compounded quarterly,for how long must Mrs.Lavergne make deposits?

Accepted Answer

The answer of Mrs.Lavergne deposits $562.71 at the beginning of...

Question 5

Geomax pays $8710.00 at the beginning of each year for using a tract of land.What should the company offer the property owner as a purchase price if interest is 10.18% compounded annually?

Accepted Answer

The answer of Geomax pays $8710.00 at the beginning of...

Question 6

Gibran bought a boat valued at $110 194.00 on the installment plan.He made equal semi-annual payments for 6 years.If the first payment is due on the date of purchase and interest is 7.5% compounded semi-annually,what is the size of the semi-annual payments?

Accepted Answer

The answer of Gibran bought a boat valued at $110...

Question 7

A lease requires monthly payments of $1150.00 due in advance.If interest is 16% compounded quarterly and the term of the lease is 4 years,what is the cash value of the lease?

Accepted Answer

The answer of A lease requires monthly payments of $1150.00...

Question 8

Determine the future value and the present value of monthly payments of $173.00 each for six years at 6.48% compounded monthly if
a)the payments form an annuity due;
b)the payments form an ordinary annuity.

Accepted Answer

The answer of Determine the future value and the present...

Question 9

Bow Valley Credit Union entered a lease contract valued at $3100.00.The contract provides for payments at the beginning of each month for three years.If interest is 8.8% compounded quarterly,what is the size of the monthly payment?

Accepted Answer

The answer of Bow Valley Credit Union entered a lease...

Question 10

Note: The calculations for this question were done using Excel's RATE function.
What is the nominal annual rate of interest charged quarterly on a lease valued at $2340.00 if payments of $240.00 are made at the beginning of every three months for 3.25 years?

Accepted Answer

The answer of Note: The calculations for this question were...

Question 11

Sagheer is setting up a fund to help his grandson's university education.He wants his grandson to be able to withdraw $3000 every 3 months for 3 years after he starts university.His first withdrawal will be 5½ years from now.If the fund can earn 7.2% compounded quarterly,what single amount contributed today will provide for the withdrawal?

Accepted Answer

A) $32 119 
B) $22 083 
C) $52 077 
D) $42 041 
E) $36 000

Question 12

Payments of $1000.00 are made into a fund at the beginning of every month for 10 years.If the fund earns interest at 12% compounded monthly,what will the balance in the fund at the end of the term?

Accepted Answer

The answer of Payments of $1000.00 are made into a...

Question 13

Asif received a bonus of $10 000,which he immediately invested in a fund earning 9.25% compounded semi-annually through his Tax Free Savings Account.Five years later,Asif plans to make the first semi-annual withdrawal of $1000.After how many withdrawals,the fund will be completely depleted?

Accepted Answer

A) 29 
B) 28 
C) 27 
D) 20 
E) 10

Question 14

An investment in a lease offers returns of $4000 per month due at the beginning of each month for 5 years.What investment is justified if the returns are deferred for three years and the interest required is 12% compounded monthly?

Accepted Answer

The answer of An investment in a lease offers returns...

Question 15

Calculate the present value of payments of $100.00 made at the beginning of each quarter for ten years if the interest is 6% compounded quarterly.

Accepted Answer

The answer of Calculate the present value of payments of...

Question 16

What sum of money must be deposited in a trust fund to provide a scholarship of $630.00 payable at the end of each month if interest is 7.8% compounded monthly?

Accepted Answer

The answer of What sum of money must be deposited...

Question 17

Aaron Perry bought an income property for $41 321.00 three years ago.He has held the property for the three years without renting it.If he rents the property now,what should be the size of the monthly payment due in advance be if money is worth 6.24% compounded monthly?

Accepted Answer

The answer of Aaron Perry bought an income property for...

Exam 13: Annuities Due, deferred Annuities, and Perpetuities