A. Christina Yuang sold a piece of land in Chicago. The buyer is obligated to pay...

A. Christina Yuang sold a piece of land in Chicago. The buyer is obligated to pay a lump sum of $400,000 in 6 years. The buyer sets up an account so that enough money will be present to pay off the $400,000. The buyer wants to make semiannual payments into the account. The account pays 9% compounded semiannually. What amount must be deposited at the end of each semiannual period?

B. Robert Smith places $200 of his monthly child support check into an annuity for the education of his child. He does this at the end of each month for 10 years into an account paying 7% interest compounded monthly. What is the final value of the annuity after 10 years?

C. Jeff Blank bought an antique car for his auto collection. He agreed to pay a lump sum of $28,000 after 3 years. Jeff sets up an account so that money will be present to pay off his debt. He wants to make payments at the end of each quarter. The account pays 6% compounded quarterly. Find the amount of each quarterly payment into the account.

D. The CEO of a manufacturing company wants to set up a sinking fund to accumulate funds needed in 3 years for new equipment. The cost is estimated to be $85,000. The board of directors decides to make quarterly deposits at the end of each quarter into a fund earning 8% interest compounded quarterly. Find the amount of each quarterly payment.

Please explain all clearly :) thank you!

Expert Solution

jeff jeffy answered 1 year ago

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