Section 8.5 YouTube Video problems
1. Find the present value of an ordinary annuity which has deposits of
$10279 semiannually for 5 years at 7.6% compounded semiannually.
2. Find the lump sum deposited that will yield the same total amount as
this yearly payment (made at the end of each year for 20 years at the
given interest rate, compounded annually.) $2400 at 6%
3. Find the payment necessary to amortize the loan. $9,900 at 12%
compounded monthly and 48 monthly payments.
4. Find the payment necessary to amortize a 4% loan of $2600
compounded quarterly with 7 quarterly payments. Calculate the
total payments and the total amount of interest paid.
5. Find the monthly house payment necessary to amortize the following loan:
$50,000 at 7.11% for 3 years
6. Jamal Collins buys a car costing $19300. He agrees to make payments at the
end of each monthly period for 5 years. He pays 6.0% interest compounded
monthly. What is the total amount of each payment? Find the total amount
of interest Jamal will pay.
7. An employee charged $3550 on his credit card to relocate for his first
job. After noticing that the interest rate for his balance was 15% compounded
monthly, he stopped charging on the account. He wishes to pay off his balance
in 2 years using automatic payments sent at the end of each month. What
monthly payment must he make to pay off the account in 2 years? How much
total interest will he have paid?
8. Often lottery winnings are divided into equal payments given annually for 20 to
25 years. So, the present value of the winnings is worth less than the actual
jackpot, depending on the rate at which money could be invested. Find the
present value in dollars below:
JACKPOT
AMOUNT
$12,000,000
$12,000,000
INTEREST
RATE
7%
12%
EQUAL ANNUAL PRESENT VALUE
PAYMENTS
(IN DOLLARS)
20
$___________
25
$___________