## AN7 Annuity Examples

The total cost of a car is 15,000. To purchase the car using a loan repaid by monthly installments, you are quoted the following terms.

Initial deposit 2,000
Term 4 years
Interest rate 6% a year
Payments monthly, at the end of each month.

What will your monthly payment be?

## AN6 Annuity Examples

Deposits are made into an investment account which pays an annual interest rate of 4%. Assuming each deposit has the same value, and is made at the start of each year, what will the each deposit need to be to accumulate 150,000 after 9 years?

## AN5 Annuity Examples

An annuity that will pay 2,500 a year for 8 years. If the first payment is made today and the discount rate is 5%, what is the annuity worth today?

## AN4 Annuity Examples

A bank informs you that if you invest 5,000 a year for 8 years into one of its investment accounts you will have accumulated 50,000 at the end of the 8 years. Assuming the payments are made at the end of each year, what is the annual interest rate on the account?

## AN3 Annuity Examples

A business borrows 100,000 now and repays it in 10 equal annual payments made at the end of each year. If the annual interest rate is 6%, how much will the annual payments be?

## AN2 Annuity Examples

If you deposit 5,000 at the end of each year for 21 years into an investment account which pays an interest rate of 4% a year, what will the account balance be worth at the end of the 21 years?