FINANCE-These are simple annuity questions that can be done with a BAA Calc.

| January 30, 2017

Question
These are simple annuity questions that can be done with a BAA Calc.

1. You invest $3049 at the beginning of every year and your friend invests $3049 at the end of every year. If you both earn an annual rate of return of 12.3%, how much will each of you have in your account after 39 years? (Show your answer to the nearest cent. Round your answer to the nearest 2 decimal places.

Amount in friend’s account =

Amount in your accout =

2. You currently have $3945 in a retirement savings account that earns an annual return of 11%. You want to retire in 48 years with $1,000,000. How much more do you need to save at the end of every year to reach your retirement goal?

Amount of annual savings needed =

3. You currently owe $3967 of your credit card that charges an annual interest rate of 21.6%. You make $104 of new charges every month and make a payment of $233 every month. What will your credit card balance be in three months?

Credit card balance at the end of three months =

4. You would like to retire in 30 years. The expected rate of inflation is 4% per year. You currently have a standard of living that requires $7436 of monthly expenses. Assuming you want to maintain the same standard of living in retirement, what are your monthly expenses expected to be the first year of retirement? (Show your answer to the nearest cent. Round your answer to the nearest 2 decimal places.

5. You purchases a house for $137709. You made a down payment of $20,000 and the remainder of the purchase price was financed with a mortgage loan. The mortgage loan is a 30 year mortgage with an annual interest rate of 7.8%. Mortgage payments are made monthly. What is the monthly amount of your mortgage payment? (Show your answer to the nearest cent. Round your answer to the nearest 2 decimal places.

6. Suppose you signed a contract for a special assignment over the next 10 years. You will be paid $28345 at the end of each year. If your required rate of return is 8%, what is this contract worth in today? (Show your answer to the nearest cent. Round your answer to the nearest 2 decimal places.

Value of contract today =

7. You need a loan to purchase new equipment. The loan will be paid off over 3 years with payments made at the end of every quarter. If the stated annual rate is 8% and quarterly payments are 970, what is the loan amount? (Show your answer to the nearest cent. Round your answer to the nearest 2 decimal places.

Loan amount =

8. You would like to purchase a car for $29408. If the car loan is 3.1% financed over 4 years, what will the monthly payments be for this car? (Show your answer to the nearest cent. Round your answer to the nearest 2 decimal places.

Loan payment =

9. What is the most that you would pay for an investment that promises to pay $19994 a year forever with the first payment starting one year from now? Assume that your required rate of return for this investment is 15%. (Show your answer to the nearest cent. Round your answer to the nearest 2 decimal places.

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