annuity practice problems - uta（年金u2014u2014uta实践问题）.pdf

Annuity Practice Problems 1. An employee puts $2,500 into his 401K each year for the next 20 years. How much will he have in this account if the investment earns 12.5% per year? 2. The current lottery is at $44 million. The winner receives annual payments of $1.1 million for the next 40 years. What is the present value of this prize using a 10% discount rate? 3. What is the future value annuity factor for 5 years and 12%? 4. Billy has just borrowed $18,000 to purchase a Honda Accord. Honda offered below market financing of 1.9% for 36 months. What is Billy’s monthly payment? 5. Your parents wish to purchase a vacation home in 5 years using $100,000 for a down payment. How much money do they need to save each month in order to obtain the desired $100,000 down payment? Assume they will safely invest at 5%. Answers: 1. $190,901.88 2. $10,756,955.79 3. 6.353 4. $514.78 5. $1,470.46 Rob Grovenstein practice_annuity