^[16] $1,000 is deposited at the end of each month for 5 years. Find the nominal rate of interest compounded monthly at which the deposits will accumulate to $80,000. (Answer in % using 2 places of decimals.)

 

^[17] A camper van can be purchased for $27,500 plus 14% taxes and fees. The dealer will finance the balance owing after the payment of the sales tax and a down payment of 20% of the price (without the taxes and fees). Payments will be $330.30 at the end of each month for 7 years. What nominal rate of interest compounded monthly is being charged?

 

^[18] A computer valued at $2,800 can be bought for 25% down and monthly payments of $84.60 for 2.5 years. What effective rate of interest is being charged?

 

^[19] A loan of $30,000 is to be repaid with monthly payments over a period of 20 years. Calculate the total savings in interest if the loan is financed at 12.25% compounded monthly rather than 13% compounded monthly.

 

^[20] Judith Leisure-Lee is able to set aside $1,500 every 3 months from her income. She plans to buy a studio condominium at Hemlock Valley Ski Area when she has accumulated at least $50,000. How long will it take her if she can invest her savings at 9.5% converted quarterly? (State the answer in months.)

 

^[21] A firm believer in technological education wishes to provide an educational institution with $6,000 bursaries to be awarded at the end of each year for the next 10 years. If the institution can invest money at 8.75% effective, how much should the philanthropist donate, one year prior to the first award, to set up the fund for the 10 bursaries?

 

^[22] An agreement for sale contract carries payments of $4,500 at the end of every six months for 10 years. How much should you be willing to pay for the contract if you require a return of 12.25% compounded semiannually on your money?

 

^[23] Samuel Hardy received $48,650 as a severance settlement when his position was terminated. Harvey had just celebrated his 41st birthday. He immediately and prudently invested the money in an account paying a guaranteed 9.6% compounded semiannually until his 60th birthday last year. At that time, he converted the existing balance into an ordinary annuity paying $3,750 per month with interest at 10% compounded monthly. For how long will the annuity run until all the funds have been paid out?

 

^[24] Judith Leisure-Lee purchased a small studio condominium at Whistler for $115,000. She paid $40,000 down and agreed to make equal payments at the end of every month for 25 years. The interest rate was 13.25% compounded monthly.

a. What size payment is Judith making each month?

b. After 10 years of payments, how much will Judith still owe?

c. How much will she have paid, in total, over the 25 years?

d. How much total interest will she have paid after 25 years of payments?

 

^[25] A well-used car, priced at $1,250, was sold on “easy terms” for a down payment of $250 and $50 per month for two years. What effective interest rate is being charged?

 

^[26] Dogwood Holdings financed a factory expansion by borrowing $325,000 at 10% compounded semiannually for 10 years. Payments are to be made at the end of every six months.

a. Calculate the size of the payment.

b. How much of the 4th payment is interest?

c. Calculate the outstanding balance after the 4th payment.

d. Construct an amortization schedule for the first 4 payments.

 

^[27] Save-On-Auto Parts borrowed $120,000 to purchase a fleet of seven vans. They intend to repay by making monthly payments of $2,400. Interest is at 16% compounded monthly.

a. How many full payments will Save-On-Auto Parts have to make?

b. Calculate the size of the final payment, to be made one month after the last full $2,400 payment, which will fully amortize the debt.

c. How much interest is included in the 40th payment?

d. What percentage of the loan will have been repaid by the first 48 monthly payments?

e. How much total interest will be paid?

^[28] A New York lottery offers a choice to the winner of $1,000,000 cash or $8,500 per month for 15 years. Which alternative should the winner select if money is worth:

a. 6.0% compounded monthly?

b. 6.25% compounded monthly?

 

^[29] Find the present value and future value for an annuity whose periodic payments of $1,000.00 are made at the beginning of every quarter for 7 years. The rate of interest is 13% compounded quarterly.

 

^[30] Find the present value and future value for an annuity whose periodic payments of $3,000 are made at the beginning of each six months for 15 years. The rate of interest is 8.5% compounded semiannually.