Question

Present Value
What is the present value of a $250 deposit in year 1 and another $50 deposit at the end of year 6 if interest rates are 10 percent?

Present Value of an Annuity Due
If the present value of an ordinary, 4-year annuity is $1,000 and interest rates are 6 percent, what's the present value of the same annuity due?

Future Value of Multiple Annuities
Assume that you contribute $200 per month to a retirement plan for 15 years. Then you are able to increase the contribution to $400 per month for another 25 years. Given a 5 percent interest rate, what is the value of your retirement plan after 40 years?

Present Value of Multiple Annuities
A small business owner visits his bank to ask for a loan. The owner states that he can repay a loan at $1,500 per month for the next three years and then $500 per month for the two years after that. If the bank is charging customers 5.5 percent APR, how much would it be willing to lend the business owner?

Number of Annuity Payments
Joey realizes that he has charged too much on his credit card and has racked up $3,000 in debt. If he can pay $150 each month and the card charges 18 percent APR (compounded monthly), how long will it take him to pay off the debt?

Number of Annuity Payments
Phoebe realizes that she has charged too much on her credit card and has racked up $10,000 in debt. If she can pay $300 each month and the card charges 18 percent APR (compounded monthly), how long will it take her to pay off the debt?

Future Value
Given a 7 percent interest rate, compute the year 6 future value if deposits of $2,500 and $1,500 are made in years 2 and 3, respectively, and a withdrawal of $900 is made in year 4.

Your client has been given a trust fund valued at $1 million. She cannot access the money until she turns 68 years old, which is in 12 years. At that time, she can withdraw $30,000 per month. If the trust fund is invested at a 7% interest rate, how many months will it last your client once she starts to withdraw the money?

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Financial Accounting Problems

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