Reference no: EM133185760

PART: PRESENT VAUE AND FUTURE VALUE

1. Rainder is paying $325 per month for a car over four years. If interest is 3.8% compounded monthly:

a) What was the purchase price of the car?

b) How much interest will Rainder pay overall?

2. Anil has two offers to buy his is motorcycle. The first offer is a cash price of $15,000. The second offer is a down payment of $5000, and quarterly payments of $725 for four years. If his money can earn 5.5% compounded quarterly, which option should Anil choose? What is the economic advantage?

3. What is the cash price of a dining set if monthly payments of $200 are made for three years at an interest rate of 8.5% compounded monthly?

4. A 20-year mortgage requires payments of $1194.85 per month at an interest rate of 7.8% compounded monthly. To the nearest dollar, what was the amount of the mortgage?

5. A 20-year mortgage requires payments of $1409.88 per month at an interest rate of 5.8% compounded monthly.

a) To the nearest dollar, what was the amount of the mortgage?

b) What is the outstanding balance of the mortgage after 12 years?

6. What is the present value of $300 monthly loan payments for two years if money earns 7.5% compounded quarterly?

7. What is the future value of deposits of $250 monthly for five years into an account that pays 3.75% compounded quarterly?

8. Anil is saving $100 per month. How much will he have in his account at the end of five years if his account earns 3.8% compounded quarterly?

9. Jenna is making monthly payments of $450 for four years for a car at an interest rate of 5.5% compounded semiannually. What was the purchase price of the car?

10. Kristina is saving $150 every two weeks into an account that earns 3.75% compounded quarterly.

a) How much will she have in the account after five years?

b) What amount of interest will Kristina earn from this account?