Essentials Of Investments
11th Edition
ISBN: 9781260013924
Author: Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher: Mcgraw-hill Education,
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Transcribed Image Text:Each week, $350 is placed into an annuity that earns 10% compounded weekly. Find
the value of the annuity immediately after the 487th payment.
$2,348,329.71
$65,051.36
O $5,045.28
$281,889.23
$10,176,095.41
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- On September 8, Bert Sarkis started an annuity. He arranged to have $60 deducted from his end-of-month paychecks. The money would earn 7% interest compounded monthly. (a) Find the future value of the account on December 1 using an Amortization Formula. (Round your answer to the nearest cent.) $ 10280 X (b) Find the future value of the account on December 1 by applying the Compound Interest Formula to each payment individually. (Round your answer to the nearest cent.) 5.75 X (c) Find Bert's total contribution to the account. $ 2356.176 x (d) Find the total interest. (Round your answer to the nearest cent.) $ 7923.824 Xarrow_forwardK Calculate the total interest and principal portions for the series of monthly payments of $166.95 that occur during year 7, for an ordinary annuity of $13,500 with 8.5% interest compounded quarterly for 10 years. Round your answers to two decimal places. Principal Number Interest Numberarrow_forwardIf $1000 is deposited at the end of each year for 5 years into an ordinary annuity earning 8.99% compounded annually, construct a balance sheet showing the interest earned during each year and the balance at the end of each year. Complete the balance sheet. Period Amount Interest Balance 1 $1000.00 2 $1000.00 3 $1000.00 4 $1000.00 $ $4 $1000.00 $4 $ (Round to the nearest cent as needed.)arrow_forward
- 2. Classify the type of annuity described in the following scenario. A student loan carrying interest of 2.5%, compounded quarterly is repaid with payments of $1000 at the end of every three months. Mr. Smith made 24 monthly deposits of $250 into an account that earns 8% compounded quarterly. How much will be in the account three years after his last deposit? a $6,522.87 b $7,021.41 $8,218.15 d $8,272.57 A $12,000 loan is repaid by semi-annual payments of $1,500 each. Interest on the loan is 10% compounded semi-annually. How long will it take to pay off the loan? с a 10 years b 5.5 years с 5 years d 21 yearsarrow_forwardConstruct an annuity table showing the deposits, interests, and balances for the saving plan below (compulsory to show the working steps to get the interest value): a) $350 is invested in an increasing annuity at the end of every 6 months for 3 years. The account pays 10.25% interest rate compounded semiannually. Period Beginning Interest Deposit Ending balance (Every 6 months) Balance 1 $0.00 $0.00 $350.00 $350.00 3 4 (Copy this table to your answer script)arrow_forwardNonearrow_forward
- a personal account earmarked as a retirement supplement contains 242,400. suppose 200,000 is used to establish an annuity that earns 6% compounded quarterly and pays 4,500 at the end of each quarter. How long until the account balance is zero?arrow_forwardProblem #4: A perpetuity pays $3400 at the end of every month for 11 months of each year. At the end of the 12th month of each year, it pays double that amount. If the effective ANNUAL rate is 10.7%, what is the present value of this perpetual annuity?arrow_forwardYou make semiannual deposits of $584.00 into an ordinary annuity earning 5.07% compounded semiannually. How much money is in the account after 8 years? $11349.11 How much interest did you earn in your first year? $6677.11 Note: Your answers are a dollar amount and should include a dollar signarrow_forward
- Find the deposit at the end of month needed for 14 years to provide for a perpetuity of $9900 monthly. The 1st perpetuity payment is made at the end 19 month after the last deposit, and interest changes from iz = 17.46 % to iz65 = 9.08 % on that date. Answer: 1610.13arrow_forwardYou deposit $9500 per quartely for 1 years at i, = 8.31 %. This fund then provides for a perpetuity of $6100 per year, with the first payment made n month after the final deposit. At the time of the first perpetuity payment, interest rates fall to i, = 2.37 %. Find n. %3D Answer: 30.36arrow_forwardam. 111.arrow_forward
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