Financial Math Answers

Buhle wants to save R330 284,00 within the next four years. She makes equal monthly deposits at the end of each month starting after one month and her savings accumulate interest at 12,5% per annum, compounded monthly. The size of each of the monthly deposits is

Upon their retirement in a meeting with their advisor, Mr and Mrs moraba determined the amount that they will need in order to live comfortably. They expect a 20 year retirement period. How much should mr and Mrs moraba deposit now in a bank account paying 7,5% interest per year, compounded yearly to be able to withdraw the amount of R480 700 at the end of each year, starting one year from now?

Joshua graduated from college and began working in the family restaurant business. At the end of the third month of the first year he began putting R7440. 00 per quarter in an individual retirement account and contributed to it for a total of ten years. The account earned interest at 11% per annum, compounded quarterly. The amount that was available to him after the ten years is

Future Value of Annuity Due

1. Jade Savings and Loan is paying 6% interest compounded quarterly. Find the future value of P1,000, deposited at the beginning of every 3 months, for 5 years.

2. Bela invested P2,500 at the beginning of every 3-month period, for 5 years, at 8% interest compounded quarterly. How much is Bela investment worth after 5 years?

3. If Depot Hardware Store invested P1,000 at the beginning of each month at 12% compounded monthly, how much would be in the account after 5 years?

4. Find the future value of an annuity due of P7,000 payable at the beginning of each quarter for six years if the interest rate is 14% compounded quarterly.

5. If P6,000 is deposited at the beginning of each month in a bank that pays 12% interest compounded monthly, what is the final value at the end of three years and four months?

Debbie McAdams paid 8% interest on a $12,500 loan balance. Jan Burke paid $5,000 interest on a $62,500 loan. Based on 1 year:

a. What was the amount of interest paid by Debbie?

11.A man makes payments into an investment account of $300 at time 5, $280 at time 6, $260 at time 7, and so on until a payment of $180. Assuming an annual effective rate of interest of 4.25%, calculate

PV of the payments at time 3

PV of the payments at time 0

AV of the payments at time 11

12.Calculate the PV of an annuity at year 2 where the first payment is Rs. 700 at the beginning of year 4 and then keeps increasing by Rs. 75 every year thereafter till year 18. At a rate of interest of 3.62% p.a. compounded 4-monthly. Also calculate the AV at year 21.

9.X is entitled to the following benefits :

Five annual payments at the rate of Rs. 200 p.a., the first being due at the beginning of second year from now.

Thereafter 6 annual payments at the rate of Rs. 300 p.a., the first of these being due at the beginning of 11 years from now.

An additional lump sum of Rs. 2,000 at the end of 9 years.

10. Find the PV of his benefits at the rate of interest of 3.03% p.a. compounded monthly.

A sum of Rs. 45,000 invested will provide payments of Rs. 600 each at the end of every 4 months. Find the underlying rate of interest compounded semi annually.

5.A loan of Rs. 30,000 is to be repaid with interest at 5.41% p.a. compounded 2-monthly in equal installments payable at the beginning of every 6 months for 10 years. What is the size of each installment? What amount will be paid as total interest for this loan?

6.A person deposits Rs. 2,000 p.a. for 7 years, the first deposit is made at year zero. After 7 years the quarterly deposits of Rs. 750 are made for the next 4 years. What is the amount payable to him/her immediately after the last payment, if the rate of interest if 4% p.a.? What’s the PV for the same?

7.Find the amount of an annuity due of Rs. 1,850 payable at the for 15 years, if the interest is compounded at a rate of 7.5% effective for 1o years and 8% effective thereafter.

8.A man borrows Rs. 80,000 at compound interest of 5.68% per annum and agrees to repay the money in 15 equal 4-monthly instalments. What should be the amount of each installment? Assume that the first payment is made at the end of 5 years.

1.Find the PV of an annuity consisting of 60 quarterly payments of Rs. 200, the first being made at the end of 4 years 9 months. Assume that the rate of interest is 12.3% p.a. compounded monthly.

2.Find the number of years for which an annuity due of Rs. 1,500 payable per annum accumulates to Rs. 30,000 at the effective rate of interest of 9.1% per annum.

3.How much should be deposited in a bank each year in order to accumulate Rs. 50,000 in 6 years, if the interest is calculated at a rate of 6% per annum compounded continuously?

4.A person buys a house for which he agrees to pay Rs. 5,00,000 now and Rs. 5,000 at the end of every month for 6 years. If the money is worth 8% compounded quarterly, what is the cash price of the house?

1. Find the PV of an annuity consisting of 60 quarterly payments of Rs. 200, the first being made at the end of 4 years 9 months. Assume that the rate of interest is 12.3% p.a. compounded monthly.