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Unformatted text preview: Unit 7: Annuities I nstructor Graded Project You must show your work on all problems. You may type your answer right into this document. Total points for project: 45 points. Projects must be submitted as a Microsoft Word document and uploaded to the Dropbox for Unit 7 . All Projects are due by Tuesday at 11:59 PM ET of the assigned Unit. NOTE: Project problems should not be posted to the Discussion threads. Questions on the project problems should be addressed to the instructor by sending an email or by attending office hours. Part I. Basic Computations 1. Mikes Sport Shop deposits $3,600 at the end of each year for 12 years at 7% annual interest. a. How much will this ordinary annuity be worth at the end of the 12 years? (5 points) Answer: 3600 x 17.888= 64396.80 b. How much more will this annuity be worth (annuity due) if Mike deposits the money at the beginning of each year instead of at the end of each year? (5 points) Answer: 3600 x 17.888= 64396.80 2. Barb and John Reed want to know how much they must deposit in a retirement savings account today to have payments of $1,750 every six months for 15 years. The retirement account is paying 8% annual interest, payments of $1,750 every six months for 15 years....
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- Spring '11