# An individual Retirement Account (IRA) has \$10,000 - 95050

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## shri21

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1. Determine the present value P you must invest to have future value A at simple interest rate r after time t. A=\$6000.00, r=15.0%, t=26 weeks 2. A radio commercial for a loan company states; “You only pay 33 cents a day for each \$500 borrowed.” If you borrow \$2,884 for 264 days, what amount will you repay, and what annual interest rate is the company actually charging? (assume a 360 day year) a. Amount you repay=\$___ (Round to two decimal places) \$3386.51 b. Annual interest rate=___% (Round to four decimal places) 3. Use the compound interest formula to find the present value P, for the following given values. A=\$16,700 I=0.03 N=97 P=___ (Round to the nearest ten) 4. If \$13000,00 is invested at 5 compounded quarterly, what is the amount after 7 years? The amount after 7 years will be \$___ (Round to the nearest cent) 5. If \$850 is invested at 7% compounded (A) Annually (B) Quarterly (C) monthly What is the amount after 7 years? How much interest is earned? (A) If it is compounded annually, what is the amount earned? \$___ (Round to the nearest cent) How much interest is earned? \$___ (Round to the nearest cent) (B) If it is compounded quarterly, what is the amount? \$___ (Round to the nearest cent) How much interest is earned? \$___ (Round to the nearest cent) (C) If it is compounded monthly, what is the amount? \$___ (Round to the nearest cent) How much interest is earned? \$___ (Round to the nearest cent) 6. An investment company pays 8% semiannually. You want to have \$15,000 in the future. (A) How much should you deposit now to have that amount 5 years from now? \$___ (Round to the nearest cent) (B) How much should you deposit now to have that amount 10 years from now? \$___ (Round to the nearest cent) 7. A newborn child receives a \$6000 gift toward a college education from her grandparents. How much will the \$6000 be worth in 17 years if it is invested at 5% compounded quarterly? It will be worth \$___ (Round to the nearest cent) 8. An individual Retirement Account (IRA) has \$10,000 in it and the owner decides not to add any more money to the account other than interest earned at 3% compounded daily. How much will be in the account 36 years from now when the owner reaches the retirement age? There will be \$___ in the account (Round to the nearest cent. Use a 365-day year)
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