1. You wish to accumulate $25 000 in 5 years time. To do so, you plan to make semi-annual deposits, first deposit made today. If you can earn 6% compounded semi-annually, what deposit is needed?
2. Gary deposited $300 at the end of each month into an account earning 6% compounded monthly. He made these deposits for 10 years except that in the fifth year he was unable to make any deposits. Determine the value of the account two years after the last deposit.
3. What sum of money should be set aside to provide an income of $800 a month for a period of 3 years if the money earns interest at 6% monthly and the first payment is to be received 2 years from now.
4. Find the monthly deposit needed for 5 years to provide for a perpetuity of $400 per month. The first perpetuity payment is made 2 years after the last deposit, and interest changes from 8% compounded monthly to 9% compounded monthly on that date.
5. A company borrows $100,000 with interest at 9% compounded monthly. The loan is to be amortized by monthly payments of $1550 for as long as necessary. A final smaller payment will be calculated so the loan
will a) b) c) d) e) f)
be exactly repaid.?What is the amount of the final payment??What is the outstanding balance after 48 payments have been made??What is the amount of interest paid in the 49st monthly payment of $1550??What is the principal portion of the 49th payment??What is the cost of the debt for the first four years??Construct a partial amortization schedule showing details for the last three payments, and totals.