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Chapter 3 Section 2

# Chapter 3 Section 2 - Chapter 3 Section 2 1(S12HW Calculate...

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Chapter 3 Section 2 1. (S12HW) Calculate the present value of an annuity that pays 1000 at the end of each year for 10 years using an annual effective interest rate of 8%. 2. (S12HW) Calculate the present value of an annuity that pays 100 at the end of each month for 10 years using a nominal interest rate of 6% compounded monthly. 3. (S12HW) Calculate the present value of an annuity that pays 100 at the end of each month for 10 years using an annual effective interest rate of 6%. 4. (S12HW) Calculate the accumulated value of an annuity that 50 at the end of each month for 10 years using an annual effective interest rate of 8%. 5. (S08Q2) James is buying a house. To help pay for the house, James takes out a mortgage loan of 60,000. The mortgage is to be repaid with monthly payments for 30 years. The interest rate on mortgage is 7% compounded monthly. Calculate James’s monthly mortgage payment. 6. (S12HW) Omar invests 2500 at the end of each year in an account which earns a nominal interest rate of 5% compounded quarterly.

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