Math 320

1) Dewey Cheatam invests $3,500 at the beginning of each quarter for 10 years at a rate of 11% compounded daily. What is the future value of Dewey's investment?

N= 40

I%= 11

PV= 0

PMT= -3500

FV=0

P/Y=4

C/Y=365

PMT: END/BEGIN

USING MY TI-83 TO SOVLE FOR FV I HIT ALPHA THEN ENTER THE FV VALUE OF Dewey’s investment in 10 years is $258,573.23

2) In 6 years and 3 months, the firm of Dewey, Cheatam and Howe will have to repay a $70,000 bond they have recently issued. Assume a 7 3/4% rate of interest compounded semi-annually. How much are they going to be paying each quarter to be able to have the sum of $70,000 at the end of the 6 Year 3-monthterms?

N= 25

I%= 7.75

PV=0

PMT=?

FV=70000

P/Y=4

C/Y=2

THE PMT VALUE IS $2,208.10 PER QUARTER THE FIRM OF DEWEY, CHEATAM AND HOWE WILL REPAY EACH QUATER

3) Alex is retiring today and he knows he will be able to withdraw $25,000 at the end of each year beginning one year from now. He also knows that this money will last him until his social security kicks in 10 years. The interest rate is 5.25%.  Earnings will compound daily. How much does Alex have in the bank today that allows him to pull $25,000 out for 10 years (assume that this savings account will be at zero (0) at the end of 10 years)?

N= 10

I%= 5.25

PV= 0

PMT= 25,000

FV= 0

P/Y=1

C/Y=365

Present value would be for alex retiring fund is $189,440.18

4) I am starting a college fund for my child that will run for 18 years.  I am planning to deposit $70 per week into a savings account that will earn me 3.3% interest compounded daily.   This will be an annuity due savings plan.  How much will I have at the end of the 18 years?

N=936

I%=3.3

PV=0

PMT= -70

FV=?

P/Y= 52

C/Y= 365

At the end of the 18yrs if u deposit 70 buck during that time frme you will have $89,506.97

5) I am setting up a sinking fund with quarterly payments to pay my investors the amount of $400,000 at the end of 15 years.  I will be paying into this fund at the...