business math paper

9. What is the present value of an 8-year annuity that makes quarterly payments of $73 if

It is much easier to calculate the FV of annuity when the payments are made at semiannual compounding, the periodic rate is simply the nominal rate divided by two (number of compounding periods per year). Thus, the result should be:

Let us start off by calculating the interest earned over the four years of the mortgage:

Annuities are insurance products that can provide steady retirement income.You can invest in an fixedor variable annuity that begins immediately or starts payments at a

1. Complete the table below with descriptions of different methods of communication. You should include two verbal, two non-verbal and two written methods of communication.

b. Compute the future value if the CD pays 3.2 percent; if it pays 16.8 percent. Overall,

Compounding monthly means that there are twelve interest payments per year. So, n = 12(5) = 60 and i = 0.08/12 = [pic]

11. A 65-year-old wishes to convert the cash value of his insurance policy into an annuity. He can select an annuity that will last 15 years or one that lasts 20 years. If the cash value is $450,000 and interest rates are 5.25%, how much less per year will he receive if he chooses the 20-year annuity?

Suppose you take a mortgage for $72,764 for 16 years with annual payments.  If the annual interest rate is 3.4%, calculate the total interest amount paid over the life of the loan. That is, calculate the total interest paid in 16 years.

APR stands for annual percentage rate, and this term means how much interest you will pay back on money you borrowed. This is very important when applying for credit cards because the hire the APR is the more money you will have to pay back. Some credit card companies offer a grace period for

17. You have been told that you need $21,600 today in order to have $100,000 when you retire 42 years from now. What rate of interest was used in the present value computation? Assume interest is

In question four, Janet was asked to solve a question that deals with annuity payments, specifically, ordinary annuities. It starts by asking of how much you will make if you add $2,000 every year and it is compounded by 10% interest every year. These, for the most part, are future value problems. The first one comes out to be a future value of $12,210.20, which does not satisfy the need for $20,000. The next part asks what the value would be if the interest was compounded semiannually. You have to do an equation in order to find out what the effective annual interest rate. Through this equation you come out with a value of 10.25% and after the calculator calculations you come out with a future value of $12,271.11, also not meeting the demand for that first year of college. The next part asks what payment will you need in order to get to that $20,000 number and the present value comes to be $3,275.95. Next, the case asks what original payment you would need in order

Selling annuity payments for cash is not a small decision, and there are numerous factors to consider before making up your mind.

1. Assume that at retirement you have accumulated $825,000 in a variable annuity contract. The assumed investment return is 5.5% and your life expectancy is 18 years. What is the hypothetical constant benefit payment?

First we need to get the present value of the annuity for the 1,500 semiannual PMTs at year 14