quiz_4_soln - % Name: ID: (Surname) (First Name) 1. Stuart...

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Unformatted text preview: % Name: ID: (Surname) (First Name) 1. Stuart wishes to have $15,000 to buy a used car three years from now. He plans to accomplish this, through an account with a nominal interest rate of 3% compounded monthly, by depositing $300 at the end of each month during the first year, and Q at the end of each month during the next two years. What is the smallest Q that will suffice? (answer to the nearest cent) ; Lil _. /,//-}'F-ier 195m imam/+355) $3003.??? -. 194504-931 4y 1" “52. A a y. a...” \ , ‘9“ ’ WWW», a W In,” ‘ J ‘1: 5 » ’ a ) . 5C “'7 «L AM. a.) .3. flag +‘ {H} fig.ng ) x it? H V y 5% “:3 (Raw/9 “:2. léwfiém) mafia EM} W‘f ) I 2_ Calculate the present value of an annuity which pays $100 at the beginning of each month for five months. Using simple discount with an annual effective rate of discount ofiB%.(answer to the nearest cent). W-é) 7-" l- [W't slim/Me dkacufl‘l" t fin (765mg. 6??? 2; I“,@ff.t i Lg/‘A’ei/Lt’ [:5 in :00 [mi r WI) "r Vii-l m?) Wm] - Z: + [MID/5- '1 1"“,0151’2J [r90 [glxr,,°18§ 4? ,3??? g» “762; ,f..§?%: ‘ ’ :2 9435 ’lm . A lf‘z“ .n/j‘f ; i‘lgflf 1/1” i. it : » ‘5; 7/ 53%; W / 3. A continuously paying level annuity pays $200 each year for ten years. The force of interest is 2/(1+2t). Find the present value of this annuity. (answers to the nearest cent) .fsxs §%sfi ameué %#ur Hfimzé : 6 :6 36 x :: l+ “Ll: l4? (’9 K/ ’0 0 24:20 QM; 1:: l&0£fi(l*1fij/O :l 7:02;) a“ W l o 0 7/3,“? \ , Via :iwflfll 4. Shelly has a saving account that earns 2.5% interest payable continuously and has a current balance of $40,000. If Shelly withdraws funds continuously at a rate of $3000 per year, at what time will she have exhausted her savings? (answer to 5 significant digits) 7—Way :1 a We? a? as 13,23 1“ Chi-":7 ‘ £7 133223 :2 C WM? 901? ‘\ @ ll ll §' 48 \Q 5. A perpetuity I has annual payments. The first payment is for $150 and then payments increase by $50 each year until they become level at $1000. Find the value of this perpetuity at the time of the first payment using an annual effective interest of 4%. (answer to the nearest cent) La A Le me w, lé ‘3 .A 1 _ ’?‘ _ i j f} 2:. 157; Haw-r may 1w: Wm” wwav’ railway new (a 1/ at?" ()3 “(1) =2. ’ (i Vin 2'; W0 MWWW l€W / :9 pm“:— M‘a Mace/n37 / t; 22/ e s M 3;, H0 vL-Wazw / ) Of / ‘ mm ( [A QM) \ MW 7’” 5 (9 ,m \ a WWW "watnuuams N.) \ y» l ‘fififl? ; j fiflflJlQV/ill / 7 l M7 /i 8% r fl-f /' V / Il/‘v “ ’ 6 ll ( ( f V" Iii “1/3, w If l V] y/ / I r {ll/l, (l) / / I)“ (27‘ 3'. / PM” ’l /‘ 5/? l [wile/I i‘ / ,/ /7 9 Name: “)2 (Surname) (First Name) 1. Stuart wishes to have $15,000 to buy a used car three years from now. He plans to accomplish this, through an account with a nominal interest rate of 4% compounded monthly, by depositing $400 at the end of each month during the first year, and Q at the end of each month during the next two years. What is the smallest Q that will suffice? (answer to the nearest cent) . age \ ljlgrlx MI? W ’7‘298 623373 «f gm; (2 aging )ww—r g ,3“ i1 (>1 0cm = WW 0+» A a? €3,277 5 “a”? (Q; "a: Mary! l 2. Calculate the present value of an annuity which pays $100 at the beginning of each month for five months. Using E JV» i simple discount with an annual effective rate ofdiscount of;€)%.(answer to the nearest cent). Vlt) “z”, “330%; {3%ng I") AA (7&5‘V‘a‘ M“ VH7) 7; /~.02Lf“.t/ wwe {3. F3 flwg‘fiwyfifiy {in ymwrfig‘ W0£WW t 1/0) t WE) .1; WM ,1, WM 7- 1&0 X/ 7L /"‘3fl2«€. 7“ /'°‘” $2613“) a... /v_p1.§*{%) 7L /M’fi2[yép%}‘/ z $ I g ’ ’ r i / . .3.» f t 3. A continuously paying level annuity pays $300 each year for ten years. The force of interest isB/(lfi‘t). Find the present value ofthis annuity. (answers t the nearest cent) ‘6': at 'jmw; I ‘ i ;n‘?(€: S (gala 5a if“ at; “ flyilH’Sla m fir, m ;!a%>$630 X 8 w e w e 2:: H334; fig} .. w W a ‘ m z w M w sag-r lg ecu "a ltgfi & a 0 SW \ ‘ll 4. Shelly has a saving account that earns 25% interest payable continuously and has a current balance of $30,000. If Shelly withdraws funds continuously at a rate offifooo per year, at what time will she have exhausted her savings? (answer to 5 significant digits) wflm:;%mw§%a‘fli »% %:’1; 5?? fi03f a f? 7£“1: ’m g ?\ «a ,9 fl 3 “ " gm. , “:3 a” «z; 1m.9ZL?.§) I??§ 33 WE) 7 6. M r 5. A perpetuity . - has annual payments. The first payment is for $150 and then payments increase by $50 each year until they become level at $1000. Find the value of this perpetuity at the time of the first payment using an annual effective interest of 4%. (answer to the nearest cent) L6} A $26: fhé (4 51» ls“ ‘ r": ’5‘ e a ié AL a %&r %&a Mr 360V vw #65:? 1/ fmw M Mama/rm “v? “’X' _, w g» ‘ $5“; I j ‘P is. , Vfl :2 “2613 W" am fife-343,77 if fire w éww megawatt a: we; {Ev/«i a: 2:; (i) i (1) ‘1 xg‘ (hi/>fll 1"" 1-6”? +€0V+€0V ¢.//,+5vy/ , a ““ 5:} e a [4 3:» + “65:3 4w*$i/:/ as! . a 0 figs 3;: Q52? 7 J ’fii‘fljygzya — 2.0 07 is”? ‘30 l ‘ /,r" wry, i i If is “he / x "f " “fl (if I l I / / f x / / / 2 {if} i 1/ "in. / w W” ,, ( m, ‘l ‘ /’“ / \ may ‘i’ I; \/ V/ l ‘ / , ...
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This note was uploaded on 03/30/2012 for the course ACTSC 231 taught by Professor Chisholm during the Spring '09 term at Waterloo.

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quiz_4_soln - % Name: ID: (Surname) (First Name) 1. Stuart...

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