Question 1

A trust fund is set up to make payments of $1320.00 at the end of each month for seven years. Interest on the fund is 7.28% compounded monthly.
a) How much money must be deposited into the fund?
b) How much will be paid out of the fund?
c) How much interest is earned by the fund?

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Question 2

What is the size of semi-annual deposits that will accumulate to $113 200.00 after 9.5 years at 6.5% compounded semi-annually?

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Question 3

Planning for their child's college education, Sean and Jessica opened an account paying 8.00% compounded yearly. If ordinary annuity payments of $15 000.00 per year are to be paid out of the account for three years starting sixteen years from now, how much did the couple deposit?

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Question 4

Planning for their child's college education, David and Carol Roberts opened an account paying 6.36% compounded monthly. If ordinary annuity payments of $700.00 per month are to be paid out of the account for three years starting seven years from now, how much did the Roberts' deposit?

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Question 5

The Savoias bought an investment property valued at $160 000.00 by paying 25% down and mortgaging the balance over 25 years through equal monthly payments at 6% compounded monthly. What was the size of the monthly payments?

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Question 6

If a loan was repaid by ordinary yearly payments of $2000.00 in five years at 9.00%, compounded yearly, how much interest was paid?

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Question 7

Janice plans to retire in 10 years and would like to receive $3000.00 per month for fifteen years starting at the end of the first month after her retirement. Calculate the amount she must invest now if interest is 7.5% compounded monthly.

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Question 8

What payment made at the end of each month for 13 years will amount to $17 520.00 at 9.66% compounded monthly?

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Question 9

You have inherited some money and you want to set some of that money aside for ten years. After ten years, you would like to receive $7600.00 at the end of each 6 months for nine years. If the interest is 6.5% compounded semi-annually, how much of your inheritance must you set aside?

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Question 10

What is the size of end-of-month monthly deposits which will accumulate to $122 200.00 after six years if interest is 5.7% compounded monthly?

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Question 11

Kam expects to retire in 22 years. Beginning one month after his retirement he would like to receive $590.00 per month for 25 years. How much must he deposit into a fund today to be able to do so if the rate of interest on the deposit is 6.12% compounded monthly?

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Question 12

Doris purchased a piano with $1300.00 down and monthly payments of $214.00 for two years at 9.72% compounded monthly. What was the purchase price of the piano?

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Question 13

The Chretiens bought a rental property valued at $125 000.00 by paying 25% down and mortgaging the balance over 21.5 years through equal payments at the end of each quarter at 8.6% compounded quarterly. What was the size of the quarterly payments?

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Question 14

If a loan was repaid by quarterly payments of $715.00 over 7 years at 8.36% compounded quarterly, how much money had been borrowed?

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Question 15

What payment is required at the end of each month for 3 years to repay a loan of $8000.00 at 6.4% compounded monthly?

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Question 16

What payment is required at the end of each month for 5 years to repay a loan of $20 000.00 at 6.0% compounded monthly?

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Question 17

A loan was repaid in 7.25 years by end-of month monthly payments of $472. If interest was 6.12% compounded monthly, how much interest was paid?

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Question 18

A father wants to provide an annuity of $3350.00 payable at the end of each 6 months during the three years his son attends college. It will be six years before his son goes to college. What single deposit must he make today that will finance the annuity, if he can invest his money at 7.84% p.a. compounded semi-annually?

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Question 19

Yankee Construction agreed to lease payments of $762.79 on construction equipment to be made at the end of each month for six years. Financing is at 15% compounded monthly.
a) What is the value of the original lease contract?
b) If, due to delays, the first eight payments were deferred, how much money would be needed after nine months to bring the lease payments up to date?
c) How much money would be required to pay off the lease after nine months?
d) If the lease were paid off after nine months, what would the total interest be?
e) How much of the total interest would be due to deferring the first eight payments?

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Question 20

A car was purchased for $4500.00 down and payments of $375.00 at the end of each month for 5 years. Interest is 9.72% compounded monthly.
a) What was the purchase price of the car?
b) How much will be the amount of interest paid?

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Quiz 11: Ordinary Simple Annuities

A trust fund is set up to make payments of $1320.00 at the end of each month for seven years. Interest on the fund is 7.28% compounded monthly. a) How much money must be deposited into the fund? b) How much will be paid out of the fund? c) How much interest is earned by the fund?