Simple and Compound Interest Problems

1. A friend lends you $200 for a week, which you agree to repay with 5% one-time interest. How much will you have to repay?

1. You deposit $2,000 in an account earning 3% interest compounded monthly.
   1. How much will you have in the account in 20 years?
   2. How much interest will you earn?

1. How much would you need to deposit in an account now in order to have $6,000 in the account in 8 years? Assume the account earns 6% interest compounded monthly.

Annuities Problems

1. Jelissa has determined she needs to have $800,000 for retirement in 30 years. Her account earns 6% interest.
   1. How much would he need to deposit in the account each month?
   2. How much total money will he put into the account?
   3. How much total interest will he earn?

1. Your grandparents started putting money away for you when you were born. If they put $100 each month into an account earning 3% compounded monthly, how much will be in the account when you turn 18?

1. If you put $50 into an annuity each month and the account earns 2.75% interest compounded monthly, how much will you have in 5 years? How much of it is interest?

Payout Annuities Problems

1. You want to be able to withdraw $30,000 each year for 25 years. Your account earns 8% interest.
   1. How much do you need in your account at the beginning?
   2. How much total money will you pull out of the account?
   3. How much of that money is interest?

1. You have saved $500,000 for retirement. Your account earns 6% interest. How much will you be able to pull out each month, if you want to be able to make withdrawals for 20 years?

Loans Problems

1. You can afford a $700 per month mortgage payment. You've found a 30 year loan at 5% interest.
   1. How big of a loan can you afford?
   2. How much total money will you pay the loan company?
   3. How much of that money is interest?

1. You want to buy a $25,000 car. The company is offering a 2% interest rate for 48 months (4 years). What will your monthly payments be?

1. Lynn bought a $300,000 house, paying 10% down, and financing the rest at 6% interest for 30 years.
   1. Find her monthly payments.
   2. How much interest will she pay over the life of the loan?

1. DeShawn bought a car for $24,000 three years ago. The loan had a 5 year term at 3% interest rate. How much does he still owe on the car?