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    Tutorial 6a

    Uploaded by

    Yeong Zi Ying
    The document contains 10 word problems involving ordinary annuities with varying interest rates, time periods, and payment amounts. The problems require calculating future and present values of annuities, as well as determining periodic payment amounts or interest rates.

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    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd

    Tutorial 6a

    Uploaded by

    Yeong Zi Ying
    42 views2 pages
    The document contains 10 word problems involving ordinary annuities with varying interest rates, time periods, and payment amounts. The problems require calculating future and present values of annuities, as well as determining periodic payment amounts or interest rates.

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    © © All Rights Reserved

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    The document contains 10 word problems involving ordinary annuities with varying interest rates, time periods, and payment amounts. The problems require calculating future and present values of annuities, as well as determining periodic payment amounts or interest rates.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    42 views2 pages

    Tutorial 6a

    Uploaded by

    Yeong Zi Ying
    The document contains 10 word problems involving ordinary annuities with varying interest rates, time periods, and payment amounts. The problems require calculating future and present values of annuities, as well as determining periodic payment amounts or interest rates.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
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    Tutorial 6a

    Ordinary Annuity

    1. Suppose RM1500 is deposited at the end of each year for the next 6 years in
    an account paying 8% per year compounded annually. How much will be in the
    account at the end of this period?

    2. Sara plans to deposit RM24,000 at the end of each year for 7 years in an
    account paying 6% compounded annually. How much will she have in her
    account after 7 years? How much interest will she earn? Sara’s sister advises
    her to deposit RM2000 instead at the end of each month for the same number
    of periods in the same account type. How much will she have on deposit after
    7 years?

    3. Find the periodic payment that will amount to the given sum of RM10,000 if
    interest is 5% compounded annually and payments are made at the end of
    each year for 12 years.

    4. Find the periodic payment that will amount to the given sum of RM150,000 if
    interest is 6% compounded semi-annually and payments are made at the end
    of each semi-annual period for 11 years.

    5. At the end of each quarter, a 50-yearold woman puts RM3000 in a retirement


    account that pays 5% interest compounded quarterly. When she reaches 60,
    she withdraws the entire amount and places it in a mutual fund that pays 6.9%
    interest compounded monthly. From then on she deposits RM300 in the mutual
    fund at the end of each month. How much is in the account when she reaches
    age 65?

    6. A 45-year-old man puts RM2500 in a retirement account at the end of each


    quarter until he reaches the age of 60, then makes no further deposits. If the
    account pays 6% interest compounded quarterly, how much will be in the
    account when the man retires at age 65?

    7. Kamal wants to buy a home theater set which costs RM12000 in 4 years. In
    order to accumulate enough money to pay for the set, Kamal decides to deposit
    a sum of money at the end of each 6 months in an account paying 6%
    compounded semi-annually. How much should each payment be?
    8. Shan needs RM10,000 in 8 years. What amount should he deposit at the end
    of each quarter at 8% compounded quarterly so that he will have this amount.
    Find Shan’s quarterly deposit if the money is deposited at 6% compounded
    quarterly.

    9. To save for retirement, Kim puts RM300 each month into an ordinary annuity
    for 20 years. Interest was compounded monthly. At the end of the 20 years,
    the annuity was worth RM147,126. What annual interest rate did she receive?

    10. Ahmed needs RM5000 in three years to pay downpayment for his car. How
    much should he deposit each month in an account that pays 8% in order to
    achieve his goal?

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