I. Find the present and future value of $1000 received every month end for 20 years if the interest rate is J12 = 12% p.a. (5 marks)
II. Find the present value of $10,000 received at the start of every year for 20 years if the interest rate is J1 = 12% p.a. and if the first payment of $10,000 is received at the end of 10 years. (5 marks).
III. John is currently 25 years old. He has $10,000 saved up and wishes to deposit this into a savings account which pays him J12 = 6% p.a. He also wishes to deposit $X every month into that account so that when he retires at 55, he can withdraw $2000 every month end to support his retirement. He expects to live up till 70 years. How much should he deposit every month into his account
Answers
Answer:
1
as a person receive 1000 every month
for one year total principal 1000 * 12 = 12000
r= 12%p.a and t is 1yr
si = 12000*12*1/100 = 1440
total money received in present year 12000 + 1440 = 13440
for 20 yrs principal becomes 1000*12*20= 240000
si = 240000*12*20/100= 576000
total amt received for 20 yrs = 240000+ 576000=816000
2
present value of principal as money receive 10000 for 10 yrs = 10000*10 = 100000
si = 100000*10*12/100= 120000
amt = 220000
after 20yrs another payment received value of principal is 10000*20 = 200000
si 200000*12*20/100= 480000
amt = 200000+480000 =680000
Answer:
1
as a person receive 1000 every month
for one year total principal 1000 * 12 = 12000
r= 12%p.a and t is 1yr
si = 12000*12*1/100 = 1440
total money received in present year 12000 + 1440 = 13440
for 20 yrs principal becomes 1000*12*20= 240000
si = 240000*12*20/100= 576000
total amt received for 20 yrs = 240000+ 576000=816000
2
present value of principal as money receive 10000 for 10 yrs = 10000*10 = 100000
si = 100000*10*12/100= 120000
amt = 220000
after 20yrs another payment received value of principal is 10000*20 = 200000
si 200000*12*20/100= 480000
amt = 200000+480000 =6800000
Step-by-step explanation: