Instruction: Review textbook chapters 2 and 3 (up to section 3.5) first. Multiple reading might help. Then try to solve the homework problems quickly.
2. Tracy receives payments of $ X at the end of each year for n years. The present value of her annuity is $ 493. Gary receives payments of $ 3X at the end of each year for 2n years. The present value of his annuity is $ 2,748. Both present values are calculated at the same annual effective interest rate. Find vn .
3. Given that an+1i − ani = .177208656 and ¨an+1i − a¨ni = .185248436, find the integer n.
4. Suppose that ¨ani = 31.61667882 and sn+1i = 64024.90944. Determine i and n.
6. Given 54¨a∞i = 1000, find s22i .
7. Alice owned an annuity which had level annual payments for twelve consecutive years, the first of these being in exactly twelve years. She sold it, and the selling price of $ 21,092.04 was based on a yield rate for the investor of 7.8%. What is the amount of the level payments?
9. Mr. Bell buys a home for an unspecified amount. He pays a down payment of $ 20,000 and finances the remainder for 15 years with level end of- month payments of $1,692. The annual effective interest rate for the first five years is 4 %, and thereafter it is 6%. Mr. Bell sells the house just after making his 100th mortgage payment. The selling price is $ 258,000. How much money will Mr. Bell get at closing? (Remember, the loan holder is paid first, and then Mr. Bell receives the balance of the inflow from the resale.)
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