Time Value of Money Assignment
Dominic Joseph deposits $5,000 in a new savings account at his local bank. The account pays 5.5 percent interest compounded annually. At the end of 6 years, how much will Dominic’s account be worth?
Over the last ten years, Mary Catherine James original deposit to her savings account at her local branch of the MakesomeMoney Bank has grown to $15,000. If she had invested a single amount, made no additional payments, and earned 6.4 percent compounded annually on her deposit, how much did Mary Catherine deposit?
Gabriel Joseph has begun a new delivery and warehousing business. To begin his deliveries, he has leased a new truck. The five-year lease arrangement provides for monthly payments based on the $35,000 cost of the truck and an agreed on rate of 18 percent compounded monthly. What will Mr. Joseph’s lease payment be each month?
Anna Maria has made quarterly deposits to her savings account each quarter over a 4-year period. The account pays 8% compounded quarterly and each deposit was for $250. Anna wishes to purchase some artwork for a birthday gift for her favorite aunt. How much does she have available to make her gift purchase?
Olivia Kelly has just won the Beawinner Lottery and can elect one of two options for her payments. She can either receive $500,000 today or she can receive three annual payments as follows: $100,000 at the end of the first year, $200,000 at the end of the second year, and $300,000 at the end of the third year. If she believes she can make an investment that will pay a 9% compounded annually interest rate, should she take the $500,000 or the three payments?
Emily Zeuss invested $3,200 and earned a return of 6 percent compounded annually on her money. Her account now totals $4,811.52. How long has she allowed the funds to earn the 6 percent return?
Opal Lindsay has just taken out a loan at her bank. The bank is charging her 12 percent compounded monthly. How much is Ms. Lindsay actually paying for her loan?
Matt Wayne has $20,000 to invest and would like to double his money for the purchase of a new truck. Under current market conditions, and given his level of risk tolerance he can only earn 5 percent on his investment. Approximately how long will it take him to get his $40,000?
Maria Rosa has invested in a number of consul bonds which pay her $20,000 in total per year. The applicable interest rate on her bond is 7 percent. She has been offered $300,000 for her bonds. She does not need the cash but is always interested in a good return on investments. Should she sell the bonds?
Allie Maxudy wishes to retire in 25 years. She has decided that she should be able to invest $5,000 per year in her retirement fund. If she makes the payments in quarterly installments at the beginning of each year, and can earn an annual percentage rate of 8 percent on her money, how much will she have at the time of her retirement?
Sammy and Ruby Loveapet wish to purchase a new car. The car will cost $48,000. Their lender will provide a loan an 11 percent compounded annually, and the loan will be paid off in three annual end-of-year payments over three years. The Loveapet’s will put a downpayment of $5,000 on the auto and wish to know the following:
A. How much are their annual payments?
B. How much will be paid to the lender for interest each year?
C. What will their loan balance be at the end of each year?