Week Three

1. Mark Welsch deposits $7,100 in an account that earns interest at an annual rate of 4%, compounded quarterly. The $7,100 plus earned interest must remain in the account 4 years before it can be withdrawn. How much money will be in the account at the end of 4 years? (PV of $1, FV of $1, PVA of $1, and FVA of $1) (Use appropriate factor(s) from the tables provided. Round FV factor to 4 decimal places.)

	Present Value x f (FV of a Single Amount) = Total Accumulation $7,100 x =

2. Jones expects an immediate investment of $54,090 to return $11,000 annually for six years, with the first payment to be received one year from now. What rate of interest must Jones earn? (PV of $1, FV of $1, PVA of $1, and FVA of $1) (Use appropriate factor(s) from the tables provided.

	Present Value / Annuity Payment = p (PV of an Ordinary Annuity) Interest Rate / = %

3. Keith Riggins expects an investment of $267,794 to return $24,000 annually for several years. If Riggins earns a return of 6%, how many annual payments will he receive? (PV of $1, FV of $1, PVA of $1, and FVA of $1) (Use appropriate factor(s) from the tables provided. Round PVA factor to 4 decimal places.)

	Present Value / Annuity Payment = p (PV of an Ordinary Annuity) Annual Payments / = payments

4. C&H Ski Club recently borrowed money and agrees to pay it back with a series of six annual payments of $22,000 each. C&H subsequently borrows more money and agrees to pay it back with a series of four annual payments of $25,000 each. The annual interest rate for both loans is 7%. Find the present value of these two separate annuities. (PV of $1, FV of $1, PVA of $1, and FVA of $1) (Use appropriate factor(s) from the tables provided. Round PV factor to 4 decimal places.)

First Annuity Number of Periods Interest Rate Single Future Payment x PV of $1 Value = Amount Borrowed First payment 1 7.0% $ 22,000 x = Second payment 2 7.0% 22,000 x = Third payment 3 7.0% 22,000 x = Fourth payment 4 7.0% 22,000 x = Fifth payment 5 7.0% 22,000 x = Sixth payment 6 7.0% 22,000 x = $0 Second Annuity Number of Periods Interest Rate Single Future Payment x PV of $1 Value = Amount Borrowed First payment 1 7.0% $ 25,000 x = Second payment 2 7.0% 25,000 x = Third payment 3 7.0% 25,000 x = Fourth payment 4 7.0% 25,000 x = $0

PLEASE FILL IN EACH BLANK WITH THE CORRECT ANSWERS; WHEN ANSWERING THE QUESTIONS PLEASE USE THE SAME BOX FRAMES/FORMATS AS ABOVE THEN FILL IN THE ANSWERS