Qrb 561

QRB501 Exam III 10 March 2010

Find future value *A **of a **$2500** loan at **5.2%** simple interest in **7**years. **A* = $3,410 Find the amount, P, that has to be invested at an interest rate, 0.095 , for 1*2** years to yield **$9*000. * *P = $4,205.61 Find interest rate r needed to grow $3000 to $9500 in 8* **years. **r = *0.2708 Find A for $35*00 **invested at **6*% for 9 years

Compounded annually m = 1, A = 5,913.18

Compounded semi-annually m = 2, A = 5,958.52

Compounded quarterly m = 4, A = 5,981.99

Compounded monthly m = 12, A = 5,997.95

Compounded continuously , A = 6,006.02

Find interest rate required to grow $4000 to $190*00 **in **7** years compounded continuously. **r = *0.2226 Find value of an annuity at end of *17** years if **$15*00 is deposited every quarter in an account paying 6*%** compounded semiannually. **FV = *$175,226.90 A company estimates that it will have to replace a machine at a cost of $ 10*50000** in **5* years. To have this money in 7 years, a sinking fund is established by making equal monthly payments into an account paying 6.2% compounded monthly. How much should the monthly payment, PMT, be? PMT = $14,972.23 (where t=5) Professor, I think if t = 7, then PMT will be $10,014.85. I have answers for both t=5 and t=7. I am little bit uncertain.

What is the present value (PV) of an annuity that pays $4*00** (**PMT**) per month (**m**=12) for **8* (t) years if money is worth 3*.5%** (**r**) per year? **PV = *$33,450.27 A car loan of *$15*000 is to be repaid in 6 years in monthly payments at 9*%** per year. What is the monthly payment? **PMT = *$270.38