Suppose, today is August 7, 1991 and you deposit $25000 into an account today. Then you deposit $2500 into the same account on each August 7, beginning in 1992 and continuing until the last $ 2500 deposit is made on August 7, 1996. If a 12% annual compound interest rate is earned, what will be the balance in the account at August 7, 1996.

Q: 2)

The Cowboys want to buy a new theme park.The current owner is willing to sell if they pay $250,000 as down payment now and $150,000 for the next 6 years after that. If i=10%, what is the total cost of the playing facility?

Q3)

a) Your Grand father is 78 years old. Over the years, he has accumulated savings of $150,000. He estimates that he will live another 12 years at the most and wants to spend his savings by then. He places his $150,000 into an account earning 12 percent compounded annually and sets it up in such a way that he will be making 12 equal annual withdrawals, the first one occurring after one year from now. How much will he be able to withdraw each time?

b) $200,000 deposited in an account with 12% interest rate. If$27174 is to be taken out in every six months, how many years will this take?

Q: 4) a) You are considering buying a new car. The dealer says you can buy the car if you agree to make a lump sum amount of $5000 now and four payments of $3500, with the first payment due next year. If the appropriate discount rate is 15% per year, what is the cost of the car?

Q5)What is the number of years needed to accumulate $50,000 in an account, if $2480 is put in every three months with 12% annual interest rate.

Answer rating: 100% (QA)

Answer Q1 Annuities with Compound Interest Solution This problem involves a combination of an annuity series of deposits and compound interest We can solve it in two steps Future Value of the annuity ... View the full answer