Annuities
Question 1
How much would you have in your account if you invest $365 per month for 4 years at 9%p.a.
interest compounded monthly?
Question 2
If the interest rate is 8%p.a. compounded quarterly, how much should Peter deposit today,
so that he will be able to withdraw $680 per quarter for the next 3 years?
Question 3
Determine the monthly repayments on a $68 000 loan at 6%p.a. interest compounded monthly
over 25 years.
Question 4
Define and annuity and give 3 examples
Question 5
Distinguish between future and present value annuities.
Question 6
Mary and Alvin have decided to send their son Chris to a private university overseas in 8
years. According to their calculations, the tuition and living away expenses would
be approximately $59 000. How much should they deposit every month over the next 8
years if the interest rate is 12%p.a. compounded monthly?
