Summerwkst.lesson29

# Summerwkst.lesson29 - Summer Session Worksheet for Lesson 29 For the following formulas S is future value P is present value r is the annual

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Summer Session, Worksheet for Lesson 29 For the following formulas : S is future value, P is present value, r is the annual interest rate, k is the number of compounding periods in a year, t is time in years, A is the amount of money, and R is the amount of payment; with the formula for the periodic interest rate . It is possible a formula from the previous lesson may also be used for these problems. 10. Present Value of an Annuity: (The present value of an ordinary annuity with regular payments.) 11. ‘Sinking Fund’ Payment for an Annuity: (The amount of a payment that will provide a future value of an ordinary annuity.) 12. Amortization Formula (Installment Payments): (The amount of an installment payment when the amount borrowed is A .) 1) What regular payment should be made quarterly to provide \$20,000 in 10 years at an annual rate of 6% compounded quarterly? Round to the nearest cent. 2) What is the present value of an ordinary annuity where payments of \$800 are made monthly, the annual interest rate is 4.92%, compounded monthly, for 15 years? Round to the nearest cent. 3) Instead of receiving an annuity of \$12,000 every 6 months for the next 15 years, a young woman, Grace, would like a one-time payment, now. Assuming the annual interest rate is 8 ½ %, compounded semiannually, what would be a fair amount? Round to the nearest dollar.

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Summerwkst.lesson29 - Summer Session Worksheet for Lesson 29 For the following formulas S is future value P is present value r is the annual

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