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Computing Annuity Amounts Under Different Situations

Answer the questions to the following four separate scenarios.

• For #1 to #3, round your answer to the nearest whole dollar.
• For #4 and #5, enter the percent rounded to two digits after the decimal; enter 2.04 for 2.044% or 2.05 for 2.045%.
• Do not use a negative sign with your answer.

	1. Julie has $50,000 in a fund that earns 10% annual compound interest.	Answer
	If she desires to withdraw it in five equal annual amounts, starting today
	(at beginning of period), how much would she receive each year?
	2. Jules deposits $500 each semiannual period starting today (at beginning of period);	Answer
	this account earns 3% (annual rate). What is the balance in the account at the end of year 10?
	3. Jill purchases a new automobile that cost $28,000. She receives a $8,000 trade-in	Answer
	allowance for her old auto and signs a $20,000 note with a market rate of 8%. The note requires
	eight equal quarterly payments starting at the end of the first quarter from date of purchase.
	What is the amount of each payment?
	4. June deposits $4,000 at the end of each year in an investment account for five years at	Answer
	compound interest. The fund has a balance of $24,912 at the date of the last deposit.
	What rate of interest did she earn?
	5. On January 1, Jin owed a debt of $30,260. An agreement was reached that she would pay the debt plus	Answer
	compound interest in 24 monthly installments of $1,400, the first payment to be made at the end of
	January. What rate of annual interest is she paying?

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