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Annuity Calculations: Monthly Payments and Future Values

This guide explores practical annuity exercises focusing on monthly payments, interest rates, and future values. It includes scenarios such as calculating the total value of an annuity after a series of monthly payments of $75 at a yearly interest rate of 9% compounded monthly. Additionally, it covers determining the ordinary annuity's value after 8 years of quarterly payments, and finding monthly payments necessary for achieving a $15,000 goal in 6 years at a monthly interest rate of 0.6%. Lastly, it compares two savings strategies for Julio and Max to compute their account balances at age 65.

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Annuity Calculations: Monthly Payments and Future Values

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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 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

  3. 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.)

  4. 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.)

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