1.) Steve Madison needs $325,800 in 10 years. How much must he invest at the end

Question

1.) Steve Madison needs $325,800 in 10 years. How much must he invest at the end of each year, at 11% interest, to meet his needs?

2.) John Fillmore’s lifelong dream is to own his own fishing boat to use in his retirement. John has recently come into an inheritance of $417,200. He estimates that the boat he wants will cost $342,200 when he retires in 6 years .Assuming quarterly compounding of amounts invested at 12%, how much of John Fillmore’s inheritance must be invested to have enough at retirement to buy the boat?

3.) Adams Inc. will deposit $52,700 in a 10% fund at the end of each year for 7 years beginning December 31, 2014. What amount will be in the fund immediately after the last deposit?

4. Zach Taylor is settling a $21,000 loan due today by making 6 equal annual payments of $4,821.76. Determine the interest rate on this loan, if the payments begin one year after the loan is signed.

5. Zach Taylor is settling a $26,000 loan due today by making 6 equal annual payments of $5,969.79. What payments must Zach Taylor make to settle the loan at the same interest rate but with the 6 payments beginning on the day the loan is signed?

Explanation / Answer

1)325,800/16.722201(table 3 )=19,483.08

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