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- Find the future value of an annuity due of $502.37 per year for 18 years at 5.2%.
- Suppose that you deposit $3,250 into a retirement account today, and vow to do the same on this date every year.
Suppose that your account earns 7.45%. How much will your deposits have grown to in 30 years? - a. Lisa put $84.03 each month into an account that earned 10.47% for 29 years. How much did the account end up
being worth?
b. If Lisa had made her deposits at the beginning of each month instead of the end of the month, how much more
would she have wound up with?
F. Differing Payment and Compounding Frequencies (Optional)- Find the future value of an ordinary annuity of $375 per month for 20 years assuming an interest rate of 7.11%
compounded daily. - Find the future value of an ordinary annuity of $777.25 per quarter for 20 years, assuming an interest rate of 9%
compounded annually, and assuming interest is paid on payments made between compoundings. - Repeat Problem 29, assuming instead that no interest is paid on between-compounding payments.
G. Grab Bag- Anders put $103.45 each month in a long-term investment account that earned 8.39% for 32 years. How much total
interest did he earn? - J.J. deposits $125 at the start of each month into an investment account paying 7¼%. Assuming he keeps this up, how
much will he have at the end of 30 years? - A fi nancial planner is making a presentation to a community group. She wants to make the point that small amounts
saved on a regular basis over time can grow into surprisingly large amounts. She is thinking of using the following example:
Suppose you spend $3.25 every morning on a cup of gourmet coffee, but instead decide to put that $3.25 into an
investment account that earns 9%, which falls well within the average long-term growth rate of the investments my fi rm
offers. How much do you think that account could grow to in 40 years?
Calculate the answer to her question. - Find the future value of a 25-year annuity due if the payments are $500 semiannually and the interest rate is 3.78%.
- How much interest will I earn if I deposit $45.95 each month into an account that pays 6.02% for 10 years? For
20 years? For 40 years? - Find the future value annuity factor for an ordinary annuity with monthly payments for 22 years and an 8^5 ⁄ 8 % interest rate.
Exercises 4.2 161