MA373 S12 Homework Chapter 4

# MA373 S12 Homework Chapter 4 - Math 373 Spring 2012...

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February 22, 2012 Math 373 Spring 2012 Homework – Chapter 4 Chapter 4 Section 5 1. (S09Q3)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. (S09Q3)An annuity due makes monthly payments for 15 years. The first payment is \$10. Each subsequent payment is \$10 larger than the previous payment. Calculate the present value of this annuity using a nominal interest rate of 12% compounded monthly. 3. (S12HW) An 25 year annuity with monthly payments makes payments of 1000 at the end of each month during the first year. The payments during the second year are 1200 per month. The payments during the third year are 1400 per month.

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## This note was uploaded on 03/13/2012 for the course MA 373 taught by Professor Staff during the Fall '08 term at Purdue.

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MA373 S12 Homework Chapter 4 - Math 373 Spring 2012...

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