AS/MATH2580 A Assignment AS/MATH2580 A Assignment #2
Due Friday, February 2, 2001

Let K be the number made from the last (rightmost) two digits of your student number. For example, if your student number is 202167603 then your K = 03 = 3 (three). Or if your student number is 201087581 then your K = 81 (eighty one). Use K as indicated in the questions below.

Make sure your name and student number are on your submitted assignment. Show your work on each question. Your answer to each question should be in sentence form.

1. Amy opened a savings account with a deposit of \$(1000+K) on June 1, 1993. She then made monthly deposits of \$500 for 5 years, first deposit July 1, 1993, 60 deposits in all. She then made monthly withdrawals of \$800 for two years (24 withdrawals, the first made one month after her last deposit). Find her bank balance just after her last withdrawal assuming her account earns j12 = 5.5%

2. A man wants to set up a fund to pay college expenses for a child. He wants the fund to provide payments of \$(7000+10K) per year payable September 1, each year for 4 years, first payment September 1, 2007. He wants to make equal annual deposits into the fund, first deposit September 1, 2000, last deposit September 1, 2007. If the account earns 6.2% compounded annually, what should each of his deposits be?

3. Rent payments on an apartment are payable on the first of each month. From September 1, 2000 to December 1, 2000 the rent is \$700 per month. January 1, 2001 to August 1, 2001, the rent is \$(710+K). Find the amount needed on September 1, 2000 in an account earning j12 = 4.4% to provide for the 12 rent payments September 1, 2000 to August 1, 2001.

4. Luc made quarterly deposits of \$(700+K) into his bank account from July 1, 1989 to October 1, 1999. The account earned interest at j4 = 8% in the years 1989 to 1993, at j4 = 7% during 1994 and 1995, and at j4 = 6% in the years 1996 to 1999. Find the balance in the account on October 1, 1999 just after his last deposit.

5. A company can buy a machine for \$400000 that will produce monthly revenue (at the end of each month) of \$(9000+10K) for 5 years and then have a salvage value of \$40000. Or they can lease the same machine (and receive the same revenue) for \$8000 per month for 5 years with lease payments at the start of each month. If money is worth j12 = 9% is it better to buy or lease and what is the present value of the savings from using the less costly method?

6. A couple agrees to buy a \$250000 house for \$40000 down and the balance financed with monthly payments at j12 = 7.9%. They would like to pay \$(1000+10K) per month (first payment one month after the down payment) followed by a final smaller payment. Find the number of months needed to complete the purchase.

7. A store has a policy of charging no down payment and 16 equal monthly payments each equal to 1/16 of the list price. The store will give a customer a 10% discount for paying cash instead of time payments. Find the equivalent rate j12 that the store is charging its time-payment customers. (Use linear interpolation and show your work.)

8. To buy a condominium apartment, a man needs to take out a mortgage for \$150000 at j2 = 7%. If he can pay \$(1000+10K) per month how many full payments does he make and what is his final smaller payment?

9. A woman wants to fund an annual scholarship of \$10000 paid in perpetuity. An insurance company is willing to set up an account with interest at j4 = 5% and into this account she makes equal monthly payments for two years. Her last payment is made one month before the scholarship is first awarded. Find her monthly payment.

10. A court awards a worker back pay for the past 10 years. The settlement provides that his monthly salary in the first year was \$2000 and that it increased by 3% each year. The back pay is to be accumulated with interest at 6% per year. Find the amount of the award.

File translated from TEX by TTH, version 1.98.
On 15 Jan 2001, 16:03.