Determine the unknown quantity for each of the following independent situations using the appropriate interest tables:
1. Sue wants to have $10,000 saved when she begins college. If Sue enters college in four years and interest is 8% compounded annually, how much will Sue need to save each year assuming equal deposits at the end of each year?
2. XYZ Company has obtained a bank loan to finance the purchase of an automobile for one of its executives. The terms of the loan require monthly payments at the end of each month of $585. If the interest rate is 18% compounded monthly and the car costs $15,850, for how many months will XYZ have to make payments?
3. Diaz Company is offering the following investment plan. If deposits of $250 are made semiannually for the next nine years, $7,726 will accrue. If interest is compounded semiannually, what is the approximate annual rate of interest on the investment?
4. Jack wants to buy a rental unit. For how many periods will he have to make annual deposits of $5,000 in order to accumulate $50,445, the price of the rental unit, if interest is 12% compounded annually? Assume deposits are made at the end of each year.

  • CreatedJanuary 28, 2012
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