1. ?(Future value of an ordinary? annuity) The future value of 480 per year for 9 years compounded annually at 10 percent is $______________ (Round to the nearest? cent.)
2. (Present value of an ordinary? annuity) The present value of $2,500 per year for 10 years discounted back to the present at 10 percent is $__________ (Round to the nearest? cent.)
3. (Related to The Business of? Life: Saving for? Retirement) ?(Future value of an ordinary? annuity) You are graduating from college at the end of this semester and after reading the The Business of Life box in this? chapter, you have decided to invest 4,800 at the end of each year into a Roth IRA for the next 48 years. If you earn 9 percent compounded annually on your ?investment, how much will you have when you retire in 48 years? How much will you have if you wait 10 years before beginning to save and only make 38 payments into your retirement? account? How much will you have when you retire in 48 years? $_______________(Round to the nearest? cent.) ?
4. (Annuity payments) Mr. Bill S.? Preston, Esq., purchased a new house for $80,000. He paid $25,000 upfront and agreed to pay the rest over the next 15 years in 15 equal annual payments that include principal payments plus 9 percent compound interest on the unpaid balance. What will these equal payments? be?
Mr. Bill S.? Preston, Esq., purchased a new house for $80,000 and paid $25,000 upfront. How much does he need to borrow to purchase the? house? $_____ (Round to the nearest? dollar.)
5. (Annuity payments) To pay for your? child's education, you wish to have accumulated ?$13,000 at the end of 10 years. To do? this, you plan to deposit an equal amount into the bank at the end of each year. If the bank is willing to pay 13 percent compounded? annually, how much must you deposit each year to obtain your? goal?
The amount of money you must deposit each year in order to obtain your goal is ? (Round to the nearest? cent.) $_____________________
6. (Annuity number of? periods) How long will it take to pay off a loan of $45,000 at an annual rate of 11 percent compounded monthly if you make monthly payments of $600?? Use five decimal places for the monthly percentage rate in your calculations.
The number of years it takes to pay off the loan is years. (Round to one decimal? place.) $______________________