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1) (Compound interest) To what amount will the following investments accumulate? a

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1) (Compound interest) To what amount will the following investments accumulate?

a. $4,000 invested for 11 years at 9 percent compounded annually

 

 

 

b. $8,000 invested for 10 years at 8 percent compounded annually

 

 

 

c. $800 invested for 12 years at 12 percent compounded annually

 

 

 

d. $21,000 invested for 6 years at 5 percent compounded annually

 

 

 

2. (Present value) What is the present value of the following future amounts?

a. $800 to be received 10 years from now discounted back to the present at 10 percent

 

 

 

b. $400 to be received 6 years from now discounted back to the present at 6 percent

 

 

 

c. $1,000 to be received 8 years from now discounted back to the present at 5 percent

 

 

 

d. $900 to be received 9 years from now discounted back to the present at 20 percent

 

 

 

3. (Compound annuity) What is the accumulated sum of each of the following streams of payments?

a. $500 a year for 10 years compounded annually at 6 percent

 

 

 

b. $150 a year for 5 years compounded annually at 11 percent

 

 

 

c. $35 a year for 8 years compounded annually at 7 percent

 

 

 

d. $25 a year for 3 years compounded annually at 2 percent

 

 

 

 

 

4. (Present value of an annuity) What is the present value of the following annuities?

a. $3,000 a year for 10 years discounted back to the present at 8 percent

 

 

 

b. $50 a year for 3 years discounted back to the present at 3 percent

 

 

 

 

c. $280 a year for 8 years discounted back to the present at 7 percent

 

 

 

d. $600 a year for 10 years discounted back to the present at 10 percent

 

5. 600(1-1.1-10)/0.1 = $3,686.74 5-1B. (Compound interest) To what amount will the following investments accumulate?

a. $4,000 invested for 11 years at 9 percent compounded annually

 

b. $8,000 invested for 10 years at 8 percent compounded annually

 

c. $800 invested for 12 years at 12 percent compounded annually

 

d. $21,000 invested for 6 years at 5 percent compounded annually

 

6. (Present value) What is the present value of the following future amounts?

a. $800 to be received 10 years from now discounted back to the present at 10 percent

 

b. $400 to be received 6 years from now discounted back to the present at 6 percent

 

c. $1,000 to be received 8 years from now discounted back to the present at 5 percent

 

d. $900 to be received 9 years from now discounted back to the present at 20 percent

 

7. (Compound annuity) What is the accumulated sum of each of the following streams of payments?

a. $500 a year for 10 years compounded annually at 6 percent

 

b. $150 a year for 5 years compounded annually at 11 percent

 

c. $35 a year for 8 years compounded annually at 7 percent

 

d. $25 a year for 3 years compounded annually at 2 percent

 

 

8. (Present value of an annuity) What is the present value of the following annuities?

a. $3,000 a year for 10 years discounted back to the present at 8 percent

 

b. $50 a year for 3 years discounted back to the present at 3 percent

 

c. $280 a year for 8 years discounted back to the present at 7 percent

 

d. $600 a year for 10 years discounted back to the present at 10 percent