Financial Word Problems Assignment Answer your questions on a separate sheet of paper. Read each question carefully and be sure to answer what the question is asking. Don't forget to end every question with a word sentence. Make sure to choose the appropriate formulae from the formulae on the back of this handout. 1) Harrison is saving for his retirement and puts away $200 a month for 20 years. a) How much will he have if he just puts that money under his mattress? b) How much will he have if instead he puts it into an annuity paying 6% interest compounded monthly? c) How much interest does he earn? 2) Victoria owes money for her student loan and makes payments on it at regular intervals every 6 months. She pays $500 each time. If the interest on the loan is 2% compounded semi-annually and she still has 8 years left to pay off the loan, how much does she still owe? 3) Kajendran took an $8000 wedding gift and invested it in a GIC that pays 4.8% compounded interest compounded quarterly. How much interest will he earn in 3 years? 4) Jacob wants to have a cool million dollars to retire with when he is 55 . How much must he invest today at age 19 into an account that pays 8% compounded monthly to accomplish this goal? 5) Linnet also wants a cool million dollars when she is 55 but is willing to put away money every year. How much must she put away each year after her 21" birthday with same interest rate as Jacob but her investment is compounded annually? 6) Karen's parents put away money for her every year from the day she was born until her eighteenth birthday so she would have money for college. They put it into an account that pays 5% annually and she ended up with $40000 to spend on university. How much did they put aside each year? 7) Mike was paying off his $20000 debt by making payments to his mom who charged him a competitive 6% compound interest monthly. He made payments to her every month for 5 years to pay off his debt. What were the payments? 8) A cash advance on a credit card kick starts the simple interest owing at a daily rate. The annual interest rate on most credit cards is around 20%. If Ashley withdraws $500 cash on their credit card, how much will she owe in total when the bill is calculated 25 days later? 9) Create your own word problem that uses one of the two compound interest formulae and solve it