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?