Question 1
Walt bought a new packaging system. The system will require an annual system fee of $9415, which will decrease by $226 each subsequent year. The company is required to pay the system fee for 8 years.
The company has been doing well financially and would like to deposit the total cost of the annual fee today, into a bank account paying 4% interest, compounded annually. How much should the company deposit today to cover the total cost of the system fee?
Note: The system fee is required at the end of each year, with the first system fee billed at the end of year 1 and the last year billed at the end of year 8.

Question 2
The city of Shire received an interesting offer from a local company. The company would like the city to provide a loan of $3928050 to the company. In exchange, the company will repay the loan in the future. The company will begin making loan payments of $545966 to the city at the end of year 10. The company will make the loan payments for 15 years.
The city would like you to calculate how much the loan payments would be worth today, to make sure this is a wise investment of taxpayer dollars. Use an interest rate of 9% compounded annually to make the calculation.
Note: The city will receive the first loan payment at the end of year 10. The city will receive a total of 15 loan payments.

Question 3
Manchester owns a small business and has received an interesting offer from Wells Bank. The bank has offered to pay him a new customer incentive of $134 at the end of each year, with the amount increasing by 4% each subsequent year, as long as he continues to use the bank for all of his business needs. The bank will make the payments to him for 6 years. In addition, the bank will pay him a bonus of $310 at the end of year 2.
His current bank is trying to retain his business by offering to immediately give him a toaster and season tickets to the local sports team if he commits to staying with the bank for 5 more years.
Foster is trying to compare the two offers in terms of monetary value. Calculate the present value of the payments and the bonus from Wells Bank using an interest rate of 4% compounded annually. (In other words, how much are all of the payments worth today?)

Note: Foster would receive the first payment from Wells Bank at the end of year 1.

Question 4
Chester deposited $405428 into an account paying 3% interest compounded annually with the goal of letting the money accrue interest until the end of year 29. Unfortunately, Chester had a small health crisis at the end of year 7 and had to use the money in the account for several years to help with expenses. Chester made an annual withdrawal of $32108 at the end of each year for 2 years. Chester's health improved and he was able to let the remainder of the money accrue interest as he had originally planned. After the emergency withdrawals, how much was left in the account at the end of the 29 years?
Note: Chester makes the first withdrawal at the end of year 7. He made a total of 2 withdrawals.

Question 5
Saxon took out a loan for equipment requiring 8 loan payments in the future. The company will make the first loan payment of $17903 at the end of year 10, with each subsequent payment decreasing by 13%.
The company would like to save for these large loan payments by making 9 equal deposits at the end of each year (beginning in year 1). What amount must the company deposit each year in order to make the future loan payments? (interest rate of 4% compounded annually).
Note: The first loan payment will be made at the end of year 10. The company will make a total of 8 loan payments. The first deposit will be made at the end of year 1. The company will make a total of 9 deposits.

Question 6
Cranston Industries made an investment of $10820. In return, the company will receive $30831 at the end of year 9. How much interest will the company earn on this investment? Assume the interest is compounded annually.

Question 1 Walt bought a new packaging system. The system will re...