What is the amount of each annuity payment

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Reference no: EM132902641

Questions -

1. What is the future value of $1500 after 8 years if it is in an account paying 8% annual interest?

2. What is the present value of $800 to be received in 5 years if the 8appropriate interest rate is 12%.

3. What is the future value of #1 if money is being compounded quarterly?

4. What is the present value of #2 if money is being compounded monthly?

5. What is the future value of a 3-year ordinary annuity of $400 if the appropriate interest rate is 5%? What is the present value of the annuity? What would the future and present values be if the annuity were an annuity due?

6. What annual interest rate will cause $400 to grow to $800 in 6 years?

7. If a 4-year regular annuity has a present value of $800, and if the interest rate is 8%, then what is the amount of each annuity payment?

8. Suppose the present value of a 3-year ordinary annuity is $200. If the interest rate is 8%, what must be the annual payment?

9. An investment opportunity promises to provide a cash flow (payment) of $4,000 a year for the next 5 years. The cost of the investment is $15,000. Use the interest rate of 10% and determine whether this is a good investment.

10. You will need $30,000 for some new equipment in 3 years. In order to have the funds when they are needed, how much would you have to deposit each month in a savings account earning 5%?

Reference no: EM132902641

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