Example 4. 7 Compounding is Less Frequent than Payments Suppose you make $500 monthly deposits to a tax deferred retirement plan that pays interest at a rate of 10% compounded quarterly. Compute the balance at the end of 10 years. Given : A = $500 per month, r =10% per year, M = 4 quarterly compounding periods per year, and N = 10 years Find : F

Q: You are to pay a bill in Meralco every month for 5 years. The accumulated amount of the payment you…

A: Annuities are financial contracts that provide a stable cash flow, typically to retirees. The…

Q: Determine the principal P that must be invested at rate r = 3%, compounded monthly, so that $700,000…

A: Future value (FV) = $700,000 Interest rate = 3.50% Monthly interest rate (r) = 3.50%/12 =…

Q: Suppose you borrowe9 $12,000 at an interest rate of 8%, compounded monthly over 36 months. At the…

A: Computation:

Q: If $38,000 is invested for 15 years at 9.4% compounded quarterly and then pays out $9174 at the…

A: Future value of the amount includes the amount that was being deposited and the amount of interest…

Q: You have deposited $96,780 into an account that will earn an interest rate of 15% compounded…

A: Amount  = P [1 + (r /100) ]n where P = Principal = $ 96780 r = rate of interest = 15 /2 = 7.5% n =…

Q: Set up an amortization schedule for a $25,000 loan to be repaid in equal installment at the end of…

A: Amortization Schedule refers to a table that shows the total amount of interest and principal…

Q: Your bank will lend you $4,000 for 45 days at a cost of $50 interest. What is your effective rate of…

A: Variables in the question:Principal=$4000 Interest=$50No. of days loan is outstanding=45No. of days…

Q: A person deposits $1,000 for 5 years in an account that pays 7.2% per year compounded quarterly.…

A: Future value refers to the future date value when all cash flows are compounded at the given…

Q: Classify the financial problem. Assume a 9% interest rate compounded annually. Deposit $200 at the…

A: Solution:- When an equal amount is deposited each year, it is called annuity. The accumulated value…

Q: You deposit $400 at the end of each month into an account earning 3.7% interest compounded monthly.…

A: Future Value (FV) is a financial concept that represents the projected worth of a sum of money at a…

Q: You plan on withdrawing monthly payments for the next ten years and have deposited $100,000 inan…

A: Let's assume that the value of the monthly withdrawals be an amount A.Interest rate = 8% per annum…

Q: Assume you deposit $2,000 every six months at 10 percent compounded semi-annually. How much will you…

A: To Find: Future Value

Q: 19. An investment of P300 is made at the beginning of each month for 4 years and 3 months. How much…

A: Future value can be calculated using FV (rate, nper, pmt, [Pv], [type]) Rate The interest rate Nper…

Q: Find the value of the annuity at the end of the indicated number of years. Assume that the interest…

A: An annuity is a stream of constant payments or receipts occurring at regular interval of time. There…

Q: 5. Withdrawals increasing at a constant rate of 4% are made quarterly for six years from an account…

A: Under a systematic withdrawal approach, a fixed or a growing amount is withdrawal from the account…

Q: Answer the following questions using Excel's RATE, NPER, PMT, PV and FV functions. 1. If you save…

A: We know, while using excel's function, we need rate, NPER and PMT values and type of annuity…

Q: Find the amount accumulated FV in the given annuity account. HINT [See Quick Example 1 and Example…

A: Compound = Quarterly = 4Payment = p = $2300Time = t = 10 * 4 = 40Interest Rate = r = 7 / 4 = 1.75%

Q: 2. A loan is being repaid with 25 annual payments of 300 each. With the 10th payment, the borrower…

A: The annuity of the revised or balanced amount can be determined by using the PMT formula function in…

Q: 9) The Caines have $950,000 in a retirement account that earns an annual rate of 2.75% compounded…

A: Annuity refers to series of annual payment which are paid or received at start or end of specific…

Q: Find the periodic payment R required to accumulate a sum of S dollars over t years with interest…

A: An annuity is a cash flow that occurs at regular intervals. For instance a cash inflow of $100 each…

Q: Assume you put $200 per month into a retirement account for 12 years, and the account has an APR of…

A: The time value of money is a concept which is based on the theory that states that the value of…

Q: annualy. a What is the sie of the morchly payments bị How much interest is paid during the first…

A: loan =248000 Period =35years  interest =8.12%

Q: Payments of $2,700, due 60 days ago, and $3.200, due in 50 days, are to be replaced by payments of…

A: Time value of money states that the money with us today has more value than the same amount of money…

Q: find the final amount in this retirement account, in which the rate of return on the account and the…

A: Interest rate is 7.9% compounded quaterly for first 20 years Interest rate is 6.8% compounded…

Q: If money is woth 5 1/2% compounded annually, what single payment now equivalent to 45 annual…

A: Deferred annuity is a type of annuity in which the payment of annuity series began after a specified…

Q: Find the amount of money owed at the end of 3 years if $7,500 is borrowed at 5.5% per year…

A: Loan amount (PV) = $7500 Interest rate = 5.5% Quarterly interest rate (r) = 5.5%/4 = 1.375% Period =…

Q: tarting in 5 years and 6 months you want to be able to withdraw $950 every three months for 3 years…

A: In compounding there is interest on interest due to which large amount of interest is accumulated…

Q: What is the size of the payments that must be deposited at the end of each 6-month period in an…

A: The PMT concept can be used to determine the periodic payments that are required to accumulate a…

Q: Compute the nominal interest rate per annum payable monthly that is equivalent to the simple…

A: Simple interest refers to the method of interest calculation where the principal amount remains the…

Q: Suppose the interest rate is 10.2 % APR with monthly compounding. What is the present value…

A: Time, value of money defines the money receive today is more valuable than the money will receive in…

Q: If you borrow $5,300 at $400 interest for one year, what is your annual interest cost for the…

A: The effective interest rate, also known as the effective annual interest rate (EAR) or annual…

Q: a. How much money will you have saved after 2 years? b. How much will be owed after 2 years?

A: Information Provided: Present value = $2000 Interest rate = 7.5% compounded semi-annually

Q: Find the periodic withdrawals PMT for the given annuity account. (Assume end-of-period withdrawals…

A: 1) Solved using Financial Calculator  PV = +/- 200,000 FV = 10,000 I/Y = 4/12 = 0.33 N = 16*12 = 192…

Q: Suppose you want to accumulate $20,000 for a down payment on a house in 5 years. How much must you…

A: Compound = Monthly = 12Future Value = fv = $20,000Time = t = 5 * 12 = 60Interest Rate = r = 5 / 12 %

Q: Assume that you can invest to earn a stated annual rate of return of 12%, but where interest is…

A: We need to use future value of annuity formula to calculate annuity amount after 5 years. Future…

Q: Find the amount of interest paid on on a $800 Investment that earns 4.9% simple annual interest for…

A: Interest amount refers to an expense that is being paid on the investment amount by the bank or…

Q: How long will it take money to {A} if it earns {B}% compounded quarterly? Provide your answer in…

A: The concept of time value of money will be used and applied here.As per the concept of time value of…

Q: 1. a. In a savings account 3% annual interest rate compounded monthy, P 1,000 is deposited at the…

A: Note: It is a case where the number of questions asked is more than one and no specified question is…

Q: find the amount of money owed at the end of four years if 60,000 is well at 5% per year compounded…

A: Future value refers to the amount of money which is owed by the person after a time frame on an…

Q: 2. A loan is being repaid with 20 annual payments of P1,000 at the end of each year. Atter the tenth…

A: Here, Annual Payment is P1,000 Number of Payments is 20 Semi Annual Payments after 10 payments is X…