Practice Problems
Set C
Chapter
5
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:
Name
Date
-.
In thefollowingproblems show both the formula work andfill in the TVM solver window. Circle your solution.
la. Teri deposits $100 per month into a savings account that pays 4.45% interest compounded monthly. Determine
thatvalueofthisaccountafter10years.~-,~
r = , o q q $ f i S I 8~: / 0
N= /z ./o
0
1%=)!45
PMT=
PV=
o-NO
W V = /5,071.7 2
PfV= /z
CfV=/Z
PMT :IdZIC BEGI N
R=/oO,
5. ~ a o (~
.o Y k
~ 5//t
/+
.~ o=~
41%
~s
0 79,
) f72
'2
b. How much of the money in Teri's account after 10 years is money that she deposited?
(/04
O z > ~ / o )= #/z,
0
c. How much of the money in Teri's account after 10 years is interest earned?
-
J/$o?fI 7 2 - $ / z , o ~ o -
#3/07%7L
2. Tamika and Tim have established a sinking fund in order to have $120,000 in 17 years for their twin daughters'
college education. How much should they deposit each quarter into an account paying 6.125% interest compounded
quarterly?
N= 4.17
1 ;r=L, / 2 5
y= 0
d
MT="/o/% 4 2
FV= /2o,ooo
p,y= 4 - CfV= Y
PMT: IdZIC BEGIN
'
lg@,*'Q
= / I $ , 23591771j
vTLTr
P.-Ba.Ron ampt ton is paid monthly, and $80 is automatically deducted from his pay and deposited into a savings
"
account. If the account pays 4.8% compounded monthly, how much will be in the account after 5 years and 9 months?
S-?, R L ~ ,I - . . O . / ~ n=lz, f = $ 7 5
N= /2*S75 =G 9
I;r=r:B
PV= 0
PMT= -80 2
W V = 634 2 , ~ b *
PfY= /2
CfV= /a
PMT: Id#II[ BEGI N
J=PO[('+
-
.uvr)fi2~5~5)
.
Iz-
o~ 8 A 2
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4. Jasspreet Kaur deposits $2435 at the end of each semiannual period for 8 years into an account paying 6%
compounded semiannually. She then leaves that money alone, with no further deposits, for an additional 5 years. How ,.,
much should be in her account at the end of this 13-year period.
N= 8. t
I;== c
PV= o
C f V = tPMT :l4ZlC BEGI N
5=2~35['/
ef
f y r 5
..--
$+j',ogzaOI
I
p / ~ =r
c,v= 2PMT:Im
BEGIN
I
= #1r,9424
12-
5. At the end of each quarter, 50-year old Chuck Hickman puts $1200 into a retirement account that pays 7% interest
compounded quarterly. When he reaches age 60, he withdraws the entire amount and places it into a mutual fund that
pays 9% interest compounded monthly. From then on, he deposits $300 into the mutual h d at the end of each moth.
n = .Y; C =/O
o7/4
~ M T -/2oo
=
wv=d & d m %
1
p/y= 4
c/y= 4
PMT :l4ZI6
BEG I N
G OPort
N=/2*5=40
I%=7
-
pV= -646PB.?4
PMT= -360
/ ~ o/S9,72
,
p/y= I t
c,y= /z
PMT: l4Elq
,G/lrry/&
/=POc
a) fie
f
A=LP/P*.?~
f/+
9)"
+
.#/o'/ 532, 4f
=,
BEG IN
#22,427,
Zf
6. To save for retirement, Karla Harby put $300 each month into an ordinary annuity for 20 years. Interest was
compounded monthly. After 20
monthly did she receive during
PMT= - 5 0 0
FV= /9t 12 G
p/y= /2
C/V= /z
PMT: l4EI6 BEG I N
7'
v',
fo/we
g.erA;c~lly
yz
7. A company makes a payment of $1 200 each month into a sinking fund that earns 6% compounded monthly.
Determine how many months it will take (rounded up to the nearest month) for the sinking fund to rise to a value of
$100,000. Use either
sketch, the dimensions of your
fi=
49x357 70
I2=6
PV= 0
PMT= - / Z O O
FV= /*90ac
p,v= /&
c/v=
PMT:[dZl( BEGIN
3
- /,ooS
/a J
/,
04 5
= /2t