High School
SAT
ACT
University
MCAT
LSAT
DAT

Sarah just turned 21 years old and has decided to begin saving money. She plans…

Related Topics

Wize University Introduction to Finance Textbook > Time Value of Money

Annuities

6 Activities

Sarah just turned 21 years old and has decided to begin saving money. She plans to save $8,000 at the end of each year for 10 years, but only starting 4 years from today. Sarah's account earns a return of 12% compounded weekly. Her brother Matthew is 32 years old and just deposited $x into his savings account and plans to deposit an equal amount each year for a total of 12 years. Matthew's account earns 11% compounded continuously.

How much is Matthew's annual payment if both siblings' investments have the same present value?
More Annuities Questions:
An investment promises to pay you $500 per year for 7 years, starting one year from today. The payments will increase to $800 for the next 5 years, and then decrease to $200 per year for the last 8 years. The discount rate is 8% per year.
What is the present value of this investment?
Paul will receive $100 per year starting one year from today, the payments will continue until the end of year 5. This cash stream can be described as which of the following (select all that apply)?
Sarah took out a $40,000 loan at a 7% annual interest rate to pay for college. She plans to pay off the loan in 10 years with equal monthly payments. How much will her monthly payments be?
Rachel took out a $50,000 loan at a 6% annual interest rate to start a business. She plans to pay off the loan in 5 years with equal quarterly payments. How much will her quarterly payments be?
Maria took out a $20,000 loan at a 5% annually compounded interest rate. How much will she have to pay back in total after 3 years if she makes monthly payments?
Jenna took out a $30,000 loan at a 4% annual interest rate to buy a car. She plans to pay off the loan in 4 years with equal monthly payments. How much will her monthly payments be?
Tina wants to go to Monaco in two years. She has $1,000 now and she estimates her vacation would cost $7,500. If the interest rate is 11% per year compounded monthly, she would have to save ______ every month for the next 24 months to go on the vacation.
What is the present value of an annuity-due with $50 payments each year for 10 years? Assume a discount rate of 12%.
What is the present value of an ordinary annuity with $50 payments each year for 10 years? Assume a discount rate of 12%.
How much will you save in 30 years if you deposit $600 per month for the first 10 years, then $750 per month for the following 10 years and $900 per month in the final 10 years? Assume your account earns 18% compounded monthly. Round your intermediate values to 3 decimal places and your final answer to 2 decimal places.
Which of the following best describes a cash flow of $100 per year for 10 years starting today?
You plan on retiring in 45 years and wish to save up enough money to withdraw $20,000 per month for 30 years. The first withdrawal will be the money after you retire. For the next 45 years, your retirement savings account will earn 8% compounded monthly but will then decrease to 6% compounded monthly after retirement. How much should you save at the end of each month for the next 45 years to reach your goal?