Need help on how to find the answers to these questions in simple form?

1. What is the accumulated sum of the following stream of payments?

$2,010 every year at the beginning of the year for 6 years, at 5.12 percent, compounded annually.

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2. You have accumulated some money for your retirement. You are going to withdraw $92,190 every year at the *beginning* of the year for the next 20 years starting from today. How much money have you accumulated for your retirement? Your account pays you 11.58 percent per year, compounded annually. To answer this question, you have to find the present value of these cash flows.

3. You plan to buy a house in 6 years. You want to save money for a down payment on the new house. You are able to place $491 every month at the end of the month into a savings account at an annual rate of 8.77 percent, compounded monthly. How much money will be in the account after you made the last payment?

4. What is the present value of the following annuity?

$4,138 every half year at the end of the period for the next 13 years, discounted back to the present at 13.52 percent per year, compounded semiannually

5. You have decided to place $631 in equal deposits every month at the beginning of the month into a savings account earning 10.99 percent per year, compounded monthly for the next 8 years. The first deposit is made today. How much money will be in the account at the end of that time

Period?

6. What is the present value of the following annuity?

$2,698 every half year at the beginning of the period for the next 6 years, discounted back to the present at 12.90 percent per year, compounded semiannually.

7. Big Brothers, Inc. borrows $77,698 from the bank at 11.05 percent per year, compounded annually, to purchase new machinery. This loan is to be repaid in equal annual installments at the end of each year over the next 3 years. How much will each annual payment be?

8. You need to accumulate $74,529 for your son’s education. You have decided to place equal year-end deposits in a savings account for the next 18 years. The savings account pays 11.97 percent per year, compounded annually.

9. You plan to buy the house of your dreams in 5 years. You have estimated that the price of the house will be $118,477 at that time. You are able to make equal deposits every month at the end of the month into a savings account at a rate of 10.67 percent, compounded monthly. How much money should you place in this savings account every month in order to accumulate the required amount to buy the house of your dreams?

10. What is the present value of a $933 perpetuity discounted back to the present at 10.17 percent.* The answer should be calculated to decimal places*

11. You are given an investment to analyze. The cash flows from this investment are

End of year:

1. $1,777

2. $4,514

3. $911

4. $1,903

5. $876

What is the future value of this investment at the end of year five if 15.06 percent per year is the appropriate interest (discount) rate?

12. You have been offered the opportunity to invest in a project that will pay $5,879 per year at the end of years one through three and $9,116 per year at the end of years four and five. These cash flows will be placed in a saving account that pays 5.29 percent per year. What is the future value of this cash flow pattern at the end of year five?

13. You plan to apply for a loan from Bank of America. The nominal annual interest rate for this loan is 17.53 percent, compounded daily (with a 365-day year). What is the effective annual rate, or EAR (annual percentage yield), of this loan?

14. You are considering an investment that has a nominal annual interest rate of 6.23 percent, compounded semiannually. Therefore, the effective annual rate, or EAR (annual percentage yield) is _____.

15. Assume that the inflation rate during the last year was 1.71 percent. US government T-bills had the nominal rates of return of 3.80 percent. What is the real rate of return for a T-bill?

16. Large-cap stocks had the nominal rates of return of 10.07 percent. The rate of inflation during the last year was 3.49 percent. What is the real rate of return for large-cap stocks?

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