time value

posted by .

For the last 19 years, Mary has been depositing $500 in her savings account , which has earned 5% per year, compounded annually and is expected to continue paying that amount. Mary will make one more $500 deposit one year from today. If Mary closes the account right after she makes the last deposit, how much will this account be worth at that time?
Mary has been working at the university for 25 years, with an excellent record of service. As a result, the board wants to reward her with a bonus to her retirement package. They are offering her $75,000 a year for 20 years, starting one year from her retirement date and each year for 19 years after that date. Mary would prefer a one-time payment the day after she retires. What would this amount be if the appropriate interest rate is 7%?Mary’s replacement is unexpectedly hired away by another school, and Mary is asked to stay in her position for another three years. The board assumes the bonus should stay the same, but Mary knows the present value of her bonus will change. What would be the present value of her deferred annuity?
Mary wants to help pay for her granddaughter Beth’s education. She has decided to pay for half of the tuition costs at State University, which are now $11,000 per year. Tuition is expected to increase at a rate of 7% per year into the foreseeable future. Beth just had her 12th birthday. Beth plans to start college on her 18th birthday and finish in four years. Mary will make a deposit today and continue making deposits each year until Beth starts college. The account will earn 4% interest, compounded annually. How much must Mary’s deposits be each year in order to pay half of Beth’s tuition at the beginning of each school each year?

Respond to this Question

First Name
School Subject
Your Answer

Similar Questions

  1. Math

    Please check my work, thank you If $7,800 is deposited into an account paying 6% interest compounded annually (at the end of each year), how much money is in the account after 2 years?
  2. Personal Finance

    Mary just deposited $33,000 in an account paying 7% interest. She plans to leave the money in this account for eight years. How much will she have in the account at the end of the seventh year?
  3. Math

    Please help check my answers to make sure they are correct. I used the "sinking fund payment and present value of an ordinary annuity" formulas to solve this story problem. Thanks! Story: Naomi Dexter is 20 years old. She decides to …
  4. Algebra

    Show how you substitute the values into the formula, then use your calculator. *Use A = P(1+r/n)nt to find the amount of money in an account after t years, compounded n times per year. *Use I = Prt to find the amount of simple interest …
  5. Finance - Annuities

    Natasha plans to deposit $4,000 per year in her account for each of the next 4 years. Thereafter, she expects to deposit $1,500 per year for another 4 years. All deposits are made at year-end. Interest rates are expected to be 8 percent …
  6. Math

    (a) Themba wants to deposit a sum of money into a savings account so that he will have R30 000 in 3 years time for an overseas holiday how much money must he deposit into the account if the interest paid on the savings is 8,5% p.a …
  7. Statistics

    Mary has a savings account and is earning 10% annual interest compounded semi-annually. If she deposits $2,000 in the account every six months for three years, what will the future value of her account be?
  8. Finance

    You plan on depositing $10,000 at the end of each year for 30 years into a retirement account that pays 5% interest. How much could you withdraw annually in equal beginning of year amounts starting at the time you make your last deposit …
  9. math help Please?

    1. A savings account is started with an initial deposit of $500. The account earns 1.5% interest compounded annually. (a) Write an equation to represent the amount of money in the account as a function of time in years. (b) Find the …
  10. Algebra

    I don't understand how to do this problem: A savings account is started with an initial deposit of $500. The account earns 1.5% interest compounded annually. (a) Write an equation to represent the amount of money in the account as …

More Similar Questions