Saving annuities

Front

(FV, Ordinary Annuity, annual) Given an annual opportunity

cost of 10%, what is the future value of a $1,000

ordinary annuity for 10 years?

Back

Front

(FV, Ordinary Annuity, annual) What is the future

value in 10 years of $1,500 payments received

at the end of each year for the next 10 years?

Assume an interest rate of 8%. Formula:

Back

Front

You open a savings account that pays 4.5% annually.

How much must you deposit each year in

order to have $50,000 five years from now?

Note: for PMT, shuffling is required.

Back

Front

(PMT, Ordinary Annuity, annual) How much must you

deposit at the end of each year in an account that

pays an annual interest rate of 20%, if at the end of 5 years, you want $10,000 in the account?
Note: for PMT, shuffling is required.

Back

Front

What annual interest rate would you need in

order to have an ordinary annuity of $7,500 per

year accumulate to $279,600 in 15 years?

Back

Front

(FV, Ordinary Annuity, monthly) You are saving

up for a down payment on a house. You will deposit

$600 a month for the next 24 months in a money

market fund. How much will you have for your

down payment in 24 months if the fund

earns 10% APR compounded monthly?

Back

Front

How much will the Wintergreens

have to set aside each year starting

now to have $65,000

in 10 years if the

annual interest rate is 7%?

Back

$4,396.76

Front

(Interest rate, Annuity Due, annual)

You are told that if you invest $11,100 per year for 19 years

(all payments made at the

beginning of each year),

you will have accumulated $375,000

at the end of the period. What

annual rate of return is the investment offering?

Back

5.48%

Front

If you require a 9% annual return on

your investments, would you

prefer $15,000 five years from

today or an ordinary annuity of

$1,000 per year for 15 years? (Hint: Compare the two present values

at time 0 or the

two future values at time 15 to

maximize the return on investments).

Back

Prefer A - $15,000 five years from today