WORKSHEET (3.4)

# WORKSHEET (3.4) - equal monthly payments including all...

This preview shows page 1. Sign up to view the full content.

WORKSHEET (3.4) Present Value of an Annuity: ( 29 i i PMT PV n - + - = 1 1 Amortization: A loan is amortized if both the principal and compound interest are paid by a sequence of equal periodic payments. 1. Suppose you want to withdraw \$1,000 every 6 months for the next 2 years. How much should you deposit in an account paying 6% compounded semi-annually. 2. What is the present value of an annuity that pays \$200 per month for 5 years if money is worth 6% compounded monthly? 3. Suppose that you borrow \$5,000 from a band to buy a car and agree to repay the loan in 36
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: equal monthly payments including all interest due. If the bank charges 1% per month on the unpaid balance (12% per year compounded monthly), how much should each payment be to retire the total debt, including interest in 36 months? ( 29 n i i PV PMT-+-= 1 1 4. Assume that you buy a television set for \$800 and agree to pay for it in 18 equal monthly payments at 1.5% interest per month on the unpaid balance. How much are your payments?...
View Full Document

{[ snackBarMessage ]}

Ask a homework question - tutors are online