## College Fund Example

Calculate the college fund required to start a four year college program in 15 years time. The tuition fees are currently 12,000 and are first payable at the start of year 16. Inflation is 4% and the rate of return is 9%. In addition, calculate the lump sum which needs to be invested today to provide the college fund.

Last modified February 1st, 2022

## Individual Retirement Account Example

An individual retirement annuity account is opened with a deposit of 5,000 and since opening 200 is deposited into the account at the end of every week. The individual retirement account pays annual interest of 8.1% compounded every week with each deposit. How much will be in the account after 10 years?

Last modified July 16th, 2019

## Mortgage Loan Amount Example

You have a deposit saved for a house of 10,000 and decide that the maximum mortgage payment you can make is 800 per month at the end of each month. The annual mortgage interest rate is 6.2% and you want to finish paying the mortgage off after 25 years. What is the maximum house price you can afford.

Last modified July 16th, 2019

## Auto Loan Payment Example

A car is financed using a three-year loan. The loan has a 8% nominal annual interest rate, compounded monthly. The price of the car is 7,000, and a deposit of 2,000 is paid in cash. Calculate the monthly auto loan payments, assuming that the payments start one month after the purchase.

Last modified February 18th, 2022

## ER2 Effective Interest Rate Examples

Calculate the present value of an annuity of 600.00 per quarter for 2 years, if interest is compounded every 6 months at the nominal rate of 9%.

Last modified July 16th, 2019

## ER1 Effective Interest Rate Examples

Find the present value of an annuity due of 300 per quarter for 3 years, if interest is compounded monthly at the nominal rate of 9%.

Last modified July 16th, 2019

## AN8 Annuity Examples

A house is purchased for 130,000 using a 25 year mortgage with an interest rate 6%. How much of the monthly payments will go towards the repayment of the principal in the first 2 years. Mortgage payments are made at the end of each month.

Last modified July 16th, 2019

## PV4 Present Value Example

An investment will pay 6,000 the first year, 10,000 the second year, 18,000 the third year, (all payments are at the end of each year). What it the value of the investment today if the annual discount rate is 6.00%?

Last modified July 16th, 2019