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A rental agreement requires the payment of $900 at the beginning of each month.
7. A rental agreement requires the payment of $900 at the beginning of each month. What single payment at the beginning of the rental year should the landlord accept instead of twelve monthly payments if money is worth 6% compounded monthly? Interim calculations should be to 3 decimal places; final answer to the nearest cent.
8. Roger Baker has accumulated $600, 000 in his RRSP and is going to purchase a 25-year annuity from which he will receive month-end payments. The money used to purchase the annuity will earn 4.8% compounded monthly. If payments grow by 2.4% compounded monthly, what will be the initial payment? Interim calculations should be to six decimal places; final answer to the nearest cent.
9. What amount is required to fund a perpetuity that pays $10,000 at the beginning of each quarter? The funds can be invested to earn 5% compounded quarterly. Interim calculations should be to 4 decimal places; final answer to nearest cent.
10. The first quarterly payment of $750 in a five-year annuity will be paid in 33/4 years from now. Based on a discount rate of 8.25% compounded monthly, what is the present value of the payments today? Interim calculations should be to six decimals; final answer to the nearest cent.
11. Semiannual payments are required on an $80,000 loan at 8.0% compounded annually. The loan has an amortization period of 15 years. Calculate the interest component of Payment 5. Interim calculations should be to six decimal places; final answer to the nearest cent. Note the convention for rounding mortgage payments.
12. If a furniture retailer offers a financing plan on a $1500 purchase requiring four equal quarterly payments of $400 including the first payment on the purchase date, what effective rate of interest is being charged on the unpaid balance? Interim calculations should be to 4 decimal places; final answer to .01%
