MA373 F15 Homework Chapter 4

MA373 F15 Homework Chapter 4 - Math 373 Fall 2015 Homework...

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October 1, 2015 Copyright Jeffrey Beckley 2013, 2014, 2015 Math 373 Fall 2015 Homework Chapter 4 Chapter 4 Section 5 1. A 30 year annuity immediate pays 50 each quarter of the first year. It pays 100 each quarter of the second year. The payments continue to increase annually so that the payments in each quarter are 50 higher than the previous year. a. Calculate the present value of this annuity at an annual effective interest rate of 10%. b. Calculate the present value of this annuity at a nominal rate of 10% compounded quarterly. 2. An annuity due makes monthly payments for 15 years. The first payment is 10. Each subsequent payment is 10 larger than the previous payment. In other words, the payment at the start of the second month is 20 and the payment at the start of the third month is 30, etc. Calculate the present value of this annuity using a nominal interest rate of 12% compounded monthly. 3. Alicia is making deposits into her retirement account at the end of every month. During the first year, she deposits 100 each month. During the second year, Alicia deposits 200 each month.
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