Questions from Business Mathematics

Q: The rate of return offered by Reliance Insurance Co. on its

The rate of return offered by Reliance Insurance Co. on its 20-year annuities is 4.8% compounded monthly. What amount is required to purchase a 20-year annuity with month-end payments of $1000?

Q: Mr. and Mrs. Dafoe are doing some estimates of the

Mr. and Mrs. Dafoe are doing some estimates of the amount of funds they will need in their RRSP to purchase an annuity paying $5000 at the end of each month. For each combination of term and monthly c...

Q: If money can earn 6% compounded monthly, how much more

If money can earn 6% compounded monthly, how much more money is required to fund an ordinary annuity paying $200 per month for 30 years than to fund the same monthly payment for 20 years?

Q: Isaac wishes to purchase a 25-year annuity providing monthly payments

Isaac wishes to purchase a 25-year annuity providing monthly payments of $1000 for the first 15 years and $1500 for the remaining 10 years. An insurance company has quoted him a rate of return of 4.8%...

Q: Harold and Patricia Abernathy made a loan to their son, Jason

Harold and Patricia Abernathy made a loan to their son, Jason, to help him purchase his first car. To repay the loan, Jason made payments of $2000 at the end of each year for five years. If the intere...

Q: This problem demonstrates the dependence of the present value of an annuity

This problem demonstrates the dependence of the present value of an annuity on the number of payments. Using 7% compounded annually as the discount rate, calculate the present value of an ordinary ann...

Q: Gabriela’s monthly payments of $567.89 will pay off her

Gabriela’s monthly payments of $567.89 will pay off her mortgage loan in 7 years and 5 months. The interest rate on her mortgage is 6.6% compounded monthly. What is the current balance on the loan?

Q: A 20-year loan requires semiannual payments of $1037.

A 20-year loan requires semiannual payments of $1037.33 including interest at 6.8% compounded semiannually. 1. What was the original amount of the loan? 2. What is the loan’s balance 8 1 2 years later...

Q: The monthly payments on a five-year loan at 7.

The monthly payments on a five-year loan at 7.5% compounded monthly are $200.38. 1. What was the original amount of the loan? 2. What is the balance after the 30th payment?

Q: A hockey goalie’s goals against average (GAA) is the average

A hockey goalie’s goals against average (GAA) is the average number of goals scored against him per (complete) game. In his first 20 games in goal, O.U. Sieve had one shutout, two 1-goal games, three...