1 - Texas A&M University
Math 141 Week-In-Review
5.1-5.3
1. Find the accumulated amount after 7 yr if $13,500 is invested at 6.25%/year compounded
a. annually
b. semiannually
c. quarterly
d. monthly
e. continuously
2. Find the effective rate of interest corresponding to a nominal rate of 11%/year compounded
a. annually
b. quarterly
c. monthly
3. Find the present value of $75,700 due in 5 yr at an interest rate of 7%/year compounded monthly.
4. Find the future value of an ordinary annuity of $130/month for 10 yr at 8%/year compounded monthly.
5. Find the present value of an ordinary annuity of 48 payments of $2000 each made quarterly and earning interest at 7.5% compounded quarterly.
6. Find the payment needed to amortize a loan of $14,000 with at 8.4%/year compounded monthly installments over a period of 4 years.
7. Find the payment needed to accumulate $18,000 with monthly installments over a period of 4 years at an interest rate of 6.2%/year compounded monthly.
8. Find the present value of $120,500 due in 5 yr at an interest rate of 10%/year compounded continuously.
9. Kelly invested a sum of money 4 yr ago in a savings account that has since paid interest at the rate of 4.5%/year compounded monthly. Her investment is now worth $20,500. How much did she originally invest?
10. Jodi has contributed $300 at the end of each month into her company’s employee retirement account for the past 10 years. Her employer has matched her contribution each month. If the account has earned interest at the rate of 6.4%/year compounded monthly over the 10-year period, determine how much Jodi now has in her retirement account.
11. The Smiths have purchased a home for $170,000. They made an initial down payment of $20,000 and secured a mortgage with interest charged at the rate of 6%/year on the unpaid balance. (Interest computations are made at the end of each month.) Assume the loan is amortized over 25 year.
a. What monthly payment will the Smiths be required to make?
b. What will be their total interest payment?
12. The management of a condominium association anticipates a capital expenditure of $140,000 in 2 yr for the purpose of painting the exterior of the condominium. To pay for this maintenance, a sinking fund will be set up that will earn interest at the rate of 5.6%/year compounded monthly. Determine the amount of each (equal) monthly installment the association will be required to deposit into the fund at the end of each month for the next 2 years.
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