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Assignment (2) Questions BF

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6 views

Assignment (2) Questions BF

Uploaded by

aliabid0479
Copyright
© © All Rights Reserved
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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Assignment # 2

Solve the following Questions


1. You plan to receive $5,000 at the end of each year for 4 years. If the interest rate is 6%
per year, calculate the present value of this annuity.
2. You will deposit $1,500 at the end of each year for 3 years into a savings account earning
4% annual interest. What will be the future value of your deposits at the end of 3 years?
3. You wish to withdraw $2,500 at the end of each year for 5 years from an account that
earns 5% interest per year. Calculate the present value of these withdrawals.
4. You plan to contribute $800 at the end of each year to a retirement account that offers an
annual interest rate of 7%. What will be the future value of your contributions after 10
years?
5. You want to take a loan of $20,000 to be repaid in equal annual payments for 6 years at
an interest rate of 8% per year. Calculate the annual payment amount.
6. You decide to invest $1,200 at the end of each year for 5 years in a fund that earns 6%
interest. What will be the future value of your investment at the end of 5 years?
7. Ordinary Annuity: Evaluating Different Terms
 You are considering two investment options:
 Option A: Invest $2,000 at the end of each year for 10 years at 5% interest.
 Option B: Invest $3,000 at the end of each year for 6 years at 4% interest.
Calculate and compare the future values of both options at the end of their respective
terms.
8. You plan to invest $5,000 at the end of each year for 10 years in an account that
compounds interest annually at a rate of 6%. Calculate the future value of your
investment at the end of the 10 years.
9. You will receive $3,000 at the end of each year for 8 years from an investment that earns
an annual interest rate of 7%. What is the present value of these cash flows?
10. You decide to deposit $1,200 at the end of each quarter for 5 years in an account that pays
8% annual interest compounded quarterly. Calculate the future value of your deposits at
the end of 5 years.
11. You want to find out how much you need to invest today to receive $2,500 at the end of
each year for 4 years if the account earns 5% interest compounded annually. Calculate the
present value of this annuity.
12. You have two investment options:
 Option A: Invest $4,000 at the end of each year for 6 years at 5% annual interest
compounded annually.
 Option B: Invest $3,500 at the end of each year for 5 years at 6% annual interest
compounded annually.
Calculate and compare the future values of both options at the end of their respective
terms.
Guidelines:
 Use Times New Roman and 12 Font Size

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