Sam is thinking about taking out a loan. The interest rate is 9.50 % p.a. and is calculated daily. Sam would be making payments every month (so this is a general annuity). What is the effective rate as a decimal (not a percentage) ? Give your answer to 5 decimal places.
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- We can now use the following formula to find the present value of the account where the annuity payments are $400 each month. present value = table factor ✕ annuity payment The table factor was determined to be 21.67568. Before using the above formula, we must add 1 to the table factor since this is an annuity due. Thus, the table factor to use in the formula is 21.67568 + 1 = . Substitute the values into the formula, rounding the result to the nearest cent. present value = table factor ✕ annuity payment = ✕ 400 = $ Therefore, to receive annuity payments of $400 at the beginning of each month for 2 years, the amount that should be deposited now into an account earning 6% interest compounded monthly, to the nearest cent, is $ .If the present value of an ordinary, 7-year annuity is $6,500 and interest rates are 7.5 percent, what’s the present value of the same annuity due? (Round your answer to 2 decimal places.)If the future value of an ordinary, 6-year annuity is $5,900 and interest rates are 7.5 percent, what is the future value of the same annuity due? (Round your answer to 2 decimal places.)
- If you borrow $9000 at an annual percentage rate (APR) of r (as a decimal) from a bank, and if you wish to pay off the loan in 3 years, then your monthly payment M (in dollars) can be calculated using: M = 9000 (er/12-1) / 1 - e-3r 1) Describe what M (0.035) would represent in terms of the loan, APR, and time. 2) If you are only able to afford a max monthly payment of $300, describe how you could use the above formula to figure out what the highest interest rate the bank could offer you and you would still be able to afford the monthly payments. In addition, determine the maximum interest rate that you could afford.If the present value of an ordinary, 6-year annuity is $8,800 and interest rates are 9.5 percent, what’s the present value of the same annuity due? (Round your answer to 2 decimal places.) PV = $_______.__Suppose you are going to receive $12,700 per year for six years. The appropriate interest rate is 7.6 percent. a-1. What is the present value of the payments if they are in the form of an ordinary annuity? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) a-2.What is the present value if the payments are an annuity due? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) b-1. Suppose you plan to invest the payments for six years. What is the future value if the payments are an ordinary annuity? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) b-2. Suppose you plan to invest the payments for six years. What is the future value if the payments are an annuity due? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)
- Suppose you are going to receive $14,500 per year for five years. The appropriate interest rate is 8 percent. a-1. What is the present value of the payments if they are in the form of an ordinary annuity? Note: Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16. a-2. What is the present value of the payments if the payments are an annuity due? Note: Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) b-1. Suppose you plan to invest the payments for five years. What is the future value if the payments are an ordinary annuity? Note: Do not round intermediate..Use graphical approximation techniques or an equation solver to approximate the desired interest rate. A person makes annual payments of $1000 into an ordinary annuity. At the end of 5 years, the amount in the annuity is $ l5764.52. What annual nominal compounding rate has this annuity earned? Type the interest rate % (round to 2 decimal places)Use a calculator to evaluate an ordinary annuity formula for m, r, and t (respectively). Assume monthly payments. (Round your answer to the nearest cent.) $20; 4%; 30 yr A = $
- What is the present value of an annuity of $7,100 per year, with the first cash flow received three years from today and the last one received 25 years from today? Use a discount rate of 7 percent. (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)Percentages need to be entered in decimal format, for instance 3% would be entered as .03 in the interest rate cells.) If Samantha invests $700 today in an account that pays 4% interest compounded annually, how much will she have in her account four years from today? How much will she have in eight years and 12 years from today? (Use Future Value of a Lump Sum) What is the present value of $1,500 due in 14 years at a 5% interest rate? At a 10% interest rate? Explain why the present value is lower when the interest rate is higher. (Use Present Value of a Lump Sum) Matt is considering the purchase of an investment that will pay him $12,500 in 12 years. If Matt wants to earn a return equal to 7% per year (annual compounding), what is the maximum amount he should be willing to pay for the investment today? (Use Present Value of a Lump Sum Amount) At the end of each of the past 14 years, Vanessa deposited $450 in an account that earned 8% compounded annually. How much is in…Suppose you deposit $10 every week into an account that earns 4% interest compounded weekly. How much money (to the nearest cent) will you have in the account after 5 years? Summarize the information provided, stating the interest rate in a decimal form. d = r = N = k = Solve the problem and give your answer here
