Question

19.

How much will you have at the end of 5 years in a European vacation account if you deposit $200 a month, and the account earns 12 percent compounded monthly?

Group of answer choices

$16,334

$15,247

$16,497

$15,817



20.  

Suppose you put $100 into a savings account today, the account pays 8% compounded semiannually, and you withdraw $50 one year after your initial deposit. What would your ending balance be 20 years after the initial $100 deposit was made, assuming that you make no additional deposits?

Group of answer choices

$250.31

$257.45

$258.16

$430.10

$480.10


21.

Joan is saving to open her own dress shop in 10 years. She currently has $10,000. In addition, she plans to save $2,000 per year for the next 5 years and $3,000 per year for the following 5 years. How much will Joan have in 10 years if she earns a 10 % return on her savings?

Group of answer choices

$76,129

$63,925

$44,255

$159,370

Answer 1

19

FV of annuity	=	P * [ (1+r)^n -1 ]/ r
Periodic payment	P=	$                   200.00
rate of interest per period	r=
Rate of interest per year		12.0000%
Payment frequency		Once in 1 months
Number of payments in a year		12.00
rate of interest per period		0.12*1/12	1.0000%
Number of periods
Number of years		5
Number of payments in a year		12
Total number of periods	n=	60
FV of annuity	=	200* [ (1+0.01)^60 -1]/0.01
FV of annuity	=	16,333.93

Answer is $16,334

20

Particulars	Amount
Deposit	100
× 1 year future value factor	1.08160
Future value before withdrawl	$               108.16
Less: withdrawal	-50
Balance	$                 58.16
× future value factor	4.43881
Amount in fund	$               258.16

Answer is $258.16

21

Particulars	$10,000 today	$2,000 for 5yrs	$3,000 for 5yrs
Deposit/ annuity	10000	2000	3000
× future value factor	2.5937	6.1051
Future value in 5 years		$12,210.20
× future value factor		$1.61	$6.11
Future value in 10 years	$          25,937.42	$       19,664.65	$     18,315.30	$   63,917.37

Answer is $63,925

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