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MATH 110 Sec 8-4: Annuities Practice Exercises

MATH 110 Sec 8-4: Annuities Practice Exercises. Monthly payments of $75 are paid into an annuity beginning on January 31 with a yearly interest rate of 9% compounded monthly. What is the total value of the annuity on September 1 (round to nearest cent).

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MATH 110 Sec 8-4: Annuities Practice Exercises

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  1. MATH 110 Sec 8-4: AnnuitiesPractice Exercises Monthly payments of $75 are paid into an annuity beginning on January 31 with a yearly interest rate of 9% compounded monthly. What is the total value of the annuity on September 1 (round to nearest cent).

  2. MATH 110 Sec 8-4: AnnuitiesPractice Exercises Monthly payments of $75 are paid into an annuity beginning on January 31 with a yearly interest rate of 9% compounded monthly. What is the total value of the annuity on September 1 (round to nearest cent). First note that payments on an ordinary annuity are made at the end of each month so, by Sep 1, there are a total of 8 monthly payments.

  3. MATH 110 Sec 8-4: AnnuitiesPractice Exercises Monthly payments of $75 are paid into an annuity beginning on January 31 with a yearly interest rate of 9% compounded monthly. What is the total value of the annuity on September 1 (round to nearest cent). First note that payments on an ordinary annuity are made at the end of each month so, by Sep 1, there are a total of 8 monthly payments. Also remember that t MUST be in years. So, 8 months is year.

  4. MATH 110 Sec 8-4: AnnuitiesPractice Exercises Monthly payments of $75 are paid into an annuity beginning on January 31 with a yearly interest rate of 9% compounded monthly. What is the total value of the annuity on September 1 (round to nearest cent). where and (and )

  5. MATH 110 Sec 8-4: AnnuitiesPractice Exercises Find the value of the ordinary annuity at the end of the indicated time period (to nearest cent). The frequency of deposits is the same as the frequency of compounding. Amount: $1000, 5.5% quarterly, 8 yrs

  6. MATH 110 Sec 8-4: AnnuitiesPractice Exercises Find the value of the ordinary annuity at the end of the indicated time period (to nearest cent). The frequency of deposits is the same as the frequency of compounding. Amount: $1000, 5.5% quarterly, 8 yrs where and

  7. MATH 110 Sec 8-4: AnnuitiesPractice Exercises Kal wants to save $15,000 in 6 years with monthly payments to an ordinary annuity for a down payment on a condo at the beach. If the annuity pays 0.6% monthly interest, what will his monthly payment be? (Round answer UP to the nearest cent.)

  8. MATH 110 Sec 8-4: AnnuitiesPractice Exercises Kal wants to save $15,000 in 6 years with monthly payments to an ordinary annuity for a down payment on a condo at the beach. If the annuity pays 0.6% monthly interest, what will his monthly payment be? (Round answer UP to the nearest cent.) where and

  9. MATH 110 Sec 8-4: AnnuitiesPractice Exercises Kal wants to save $15,000 in 6 years with monthly payments to an ordinary annuity for a down payment on a condo at the beach. If the annuity pays 0.6% monthly interest, what will his monthly payment be? (Round answer UP to the nearest cent.) where and BE CAREFUL! We are accustomed to being given r (the ANNUAL interest rate). But here we are given i (the MONTHLY interest rate) instead.

  10. MATH 110 Sec 8-4: AnnuitiesPractice Exercises Kal wants to save $15,000 in 6 years with monthly payments to an ordinary annuity for a down payment on a condo at the beach. If the annuity pays 0.6% monthly interest, what will his monthly payment be? (Round answer UP to the nearest cent.) where and BE CAREFUL! We are accustomed to being given r (the ANNUAL interest rate). But here we are given i (the MONTHLY interest rate) instead. So, the problem tells us directly that

  11. MATH 110 Sec 8-4: AnnuitiesPractice Exercises Kal wants to save $15,000 in 6 years with monthly payments to an ordinary annuity for a down payment on a condo at the beach. If the annuity pays 0.6% monthly interest, what will his monthly payment be? (Round answer UP to the nearest cent.) so where and

  12. MATH 110 Sec 8-4: AnnuitiesPractice Exercises At age 21 Julio begins saving $1200 each year until age 35 (15 payments) in an ordinary annuity paying 7.5% annual interest compounded yearly and then leaves his money in the account until age 65 (30 yrs). Max begins at age 41 saving $2400 per year in the same type of account until age 65 (25 payments). How much does each have in his account at age 65? (Round answers to the nearest cent.)

  13. MATH 110 Sec 8-4: AnnuitiesPractice Exercises At age 21 Julio begins saving $1200 each year until age 35 (15 payments) in an ordinary annuity paying 7.5% annual interest compounded yearly and then leaves his money in the account until age 65 (30 yrs). Max begins at age 41 saving $2400 per year in the same type of account until age 65 (25 payments). How much does each have in his account at age 65? (Round answers to the nearest cent.) The case of Max is simpler so let’s do it first.

  14. MATH 110 Sec 8-4: AnnuitiesPractice Exercises At age 21 Julio begins saving $1200 each year until age 35 (15 payments) in an ordinary annuity paying 7.5% annual interest compounded yearly and then leaves his money in the account until age 65 (30 yrs). Max begins at age 41 saving $2400 per year in the same type of account until age 65 (25 payments). How much does each have in his account at age 65? (Round answers to the nearest cent.) The case of Max is simpler so let’s do it first. where and

  15. MATH 110 Sec 8-4: AnnuitiesPractice Exercises So for Max,$163,146.87 At age 21 Julio begins saving $1200 each year until age 35 (15 payments) in an ordinary annuity paying 7.5% annual interest compounded yearly and then leaves his money in the account until age 65 (30 yrs). Max begins at age 41 saving $2400 per year in the same type of account until age 65 (25 payments). How much does each have in his account at age 65? (Round answers to the nearest cent.)

  16. MATH 110 Sec 8-4: AnnuitiesPractice Exercises So for Max,$163,146.87 At age 21 Julio begins saving $1200 each year until age 35 (15 payments) in an ordinary annuity paying 7.5% annual interest compounded yearly and then leaves his money in the account until age 65 (30 yrs). Max begins at age 41 saving $2400 per year in the same type of account until age 65 (25 payments). How much does each have in his account at age 65? (Round answers to the nearest cent.) Now let’s look at Julio’s case.

  17. MATH 110 Sec 8-4: AnnuitiesPractice Exercises So for Max,$163,146.87 At age 21 Julio begins saving $1200 each year until age 35 (15 payments) in an ordinary annuity paying 7.5% annual interest compounded yearly and then leaves his money in the account until age 65 (30 yrs). (Round to the nearest cent.) Now let’s look at Julio’s case.

  18. MATH 110 Sec 8-4: AnnuitiesPractice Exercises So for Max,$163,146.87 At age 21 Julio begins saving $1200 each year until age 35 (15 payments) in an ordinary annuity paying 7.5% annual interest compounded yearly and then leaves his money in the account until age 65 (30 yrs). (Round to the nearest cent.) Now let’s look at Julio’s case. where and

  19. MATH 110 Sec 8-4: AnnuitiesPractice Exercises So for Max,$163,146.87 At age 21 Julio begins saving $1200 each year until age 35 (15 payments) in an ordinary annuity paying 7.5% annual interest compounded yearly and then leaves his money in the account until age 65 (30 yrs). (Round to the nearest cent.) So, after 15 years, Julio has A = $31,342.03764 in his account.

  20. MATH 110 Sec 8-4: AnnuitiesPractice Exercises So for Max,$163,146.87 At age 21 Julio begins saving $1200 each year until age 35 (15 payments) in an ordinary annuity paying 7.5% annual interest compounded yearly and then leaves his money in the account until age 65 (30 yrs). (Round to the nearest cent.) So, after 15 years, Julio has A = $31,342.03764 in his account. But now, Julio just lets that money sit in the account for 30 more years with no more periodic payments.

  21. MATH 110 Sec 8-4: AnnuitiesPractice Exercises So for Max,$163,146.87 At age 21 Julio begins saving $1200 each year until age 35 (15 payments) in an ordinary annuity paying 7.5% annual interest compounded yearly and then leaves his money in the account until age 65 (30 yrs). (Round to the nearest cent.) So, after 15 years, Julio has A = $31,342.03764 in his account. But now, Julio just lets that money sit in the account for 30 more years with no more periodic payments. This means for the last 30 years, this account is just an ordinary compound interest account.

  22. MATH 110 Sec 8-4: AnnuitiesPractice Exercises So for Max,$163,146.87 At age 21 Julio begins saving $1200 each year until age 35 (15 payments) in an ordinary annuity paying 7.5% annual interest compounded yearly and then leaves his money in the account until age 65 (30 yrs). (Round to the nearest cent.) So, after 15 years, Julio has A = $31,342.03764 in his account. But now, Julio just lets that money sit in the account for 30 more years with no more periodic payments. This means for the last 30 years, this account is just an ordinary compound interest account. where and

  23. MATH 110 Sec 8-4: AnnuitiesPractice Exercises So for Max,$163,146.87 At age 21 Julio begins saving $1200 each year until age 35 (15 payments) in an ordinary annuity paying 7.5% annual interest compounded yearly and then leaves his money in the account until age 65 (30 yrs). (Round to the nearest cent.) So, after 15 years, Julio has A = $31,342.03764 in his account. This means for the last 30 years, this account is just an ordinary compound interest account. where and

  24. MATH 110 Sec 8-4: AnnuitiesPractice Exercises So for Max,$163,146.87 At age 21 Julio begins saving $1200 each year until age 35 (15 payments) in an ordinary annuity paying 7.5% annual interest compounded yearly and then leaves his money in the account until age 65 (30 yrs (Round to the nearest cent.) and for Julio,$274,398.14

  25. MATH 110 Sec 8-4: AnnuitiesPractice Exercises At age 21 Julio begins saving $1200 each year until age 35 (15 payments) in an ordinary annuity paying 7.5% annual interest compounded yearly and then leaves his money in the account until age 65 (30 yrs). Max begins at age 41 saving $2400 per year in the same type of account until age 65 (25 payments). How much does each have in his account at age 65? (Round answers to the nearest cent.) So for Max,$163,146.87 and for Julio,$274,398.14

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