1) You deposit $2,000 in a savings account that earns 8% simple interest per year. How many years will it take to double your balance? If, instead, you deposit the $2.000 in another savings account that earns 7% interest compounded yearly, how many years will it take to double your balance?
2) Suppose that, to cover some of your college expenses, you are obtaining a person-al loan from your uncle in the amount of $20.000 (now) to be repaid in two years. If your uncle could earn 109E interest (compounded annually) on his money invested in various sons, what minimum lump-sum payment two years from now would make your uncle happy economically?
3) Assuming an interest rate of 8% compounded annually, answer the following questions: (a) How much money can be loaned now if $6,000 is to be repaid at the end of five years/ (b) How much money will be required in four years in order to repay a $15,000 loan borrowed now?
4) You have borrowed $20,000 at an interest rate of 10% compounded annually. Equal payments will be made over a three-year period, with each payment made at the end of the corresponding year. What is the amount of the annual payment? What is the interest payment for the second year?
5) What is the amount of 10 equal annual deposits that can provide five annual with-drawals, where a first withdrawal of $3,000 is made at the end of year 11 and sub-sequent withdrawals increase at the rate of 6% per year over the previous year's, if (a) the interest rate is 8% compounded annually? (b) the interest rate is 6% compounded annually?