1) Under the same conditions, which type of annuity produces a higher amount: a matured or a prepaid

annuity? Why?

Early, because payments are made earlier and interest begins to accrue sooner.

3) What is the advanced semiannual rent equivalent to an advanced monthly rent of $660, if the interest rate is
22.52% per annum convertible monthly?

C= R J 1 + 1=(12E-
1 Q 3,782.05 VA

n= 12/2 = 6
i= 0.2252 / 12 = 0.018767
C= 660

5) An architect wants to save $4000 per month for 5 years. If your savings earn 5.4% convertible monthly, how
much will you have accumulated by the month following your last deposit?

Q 276,055.59 VF

R= Q 4,000.00 per month

n= 5 years x 12 = 60
i= 5.40% monthly / 12 = 0.0045

7) To purchase a car on credit, 48 monthly installments of $4900 must be paid starting at the time of delivery of
the vehicle. If interest is charged at the rate of 15% convertible each month, what is the cash value of the
payments?

C= R j 1 + 1=(10-#
1 Q 178,265.06 VA

n= 48 monthly subscriptions
i= 0.15 / 12 = 0.0125
C= 4900

9) A young professional wants to raise $300,000 in 5 years to spend some time traveling. If you can deposit a
certain amount at 13.2% compounding per month, and under the assumption that the interest rate does
not change during that time, how much should you deposit each month in order to collect exactly the
amount you want before you make your last deposit?

Q 3,599.35 PAYMENT

M= Q 300,000.00
i= 13.2 0.132
n= 5 x 12 60 - 1 = 59
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