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Calculate the present value of an ordinary annuity

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1. Bob wants to have $900,000 in his retirement account when he retires in 40 years. How much must he deposit at the end of each month into his account in order to reach his goal? Assume that he can earn j12=5.4% on his money.

2. Patrick wants to save $500,000 in RRSP over the next 25 years. He plans to make contributions of $500 at the end of each month.

What monthly compounded nominal rate (j12) must he earn in order to realize his goal? Round your answer to 2 decimal places but don't include the % sign.

3. Mary borrowed $10,000 and agreed to repay the loan with equal monthly payments at the end of each month for 4 years. Using a rate of j12=4.8%, calculate her monthly loan payment.

Round your answer to 2 decimal places

4. Calculate the present value of an ordinary annuity with quarterly payments of $400 for 4 years. Use a rate of j4=8%.

5. The lease payments on a new computer are $46 per month for 2 years. Calculate the original price of the computer using a rate of j12=6%.

Lease payments occur at the beginning of each period.

Reference no: EM132477889

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