91Ó°ÊÓ

You deposit \(\$ 10,000\) in an account that pays \(4.5 \%\) interest compounded quarterly. a. Find the future value after one year. b. Use the future value formula for simple interest to determine the effective annual yield.

In Exercises 23-28, a passbook savings account has a rate of \(6 \%\). Find the effective annual yield, rounded to the nearest tenth of a percent, if the interest is compounded Semiannually.

There must be an error in the loan amortization schedule for my mortgage because the annual interest rate is only \(3.5 \%\), yet the schedule shows that I'm paying more on interest than on the principal for many of my payments.

You decide to work part-time at a local supermarket. The job pays \(\$ 16.50\) per hour and you work 20 hours per week. Your employer withholds \(10 \%\) of your gross pay for federal taxes, \(7.65 \%\) for FICA taxes, and \(3 \%\) for state taxes. a. What is your weekly gross pay? b. How much is withheld per week for federal taxes? c. How much is withheld per week for FICA taxes? d. How much is withheld per week for state taxes? e. What is your weekly net pay? f. What percentage of your gross pay is with held for taxes? Round to the nearest tenth of a percent.

Suppose that at age 25 , you decide to save for retirement by depositing \(\$ 50\) at the end of each month in an IRA that pays \(5.5 \%\) compounded monthly. a. How much will you have from the IRA when you retire at age \(65 ?\) b. Find the interest.

Suppose that at age 25 , you decide to save for retirement by depositing \(\$ 75\) at the end of each month in an IRA that pays \(6.5 \%\) compounded monthly. a. How much will you have from the IRA when you retire at age 65 ? b. Find the interest.

To offer scholarships to children of employees, a company invests \(\$ 15,000\) at the end of every three months in an annuity that pays \(9 \%\) compounded quarterly. a. How much will the company have in scholarship funds at the end of 10 years? b. Find the interest.

In order to start a small business, a student takes out a simple interest loan for \(\$ 4000\) for nine months at a rate of \(8.25 \%\). a. How much interest must the student pay? b. Find the future value of the loan.

You would like to have \(\$ 4000\) in four years for a special vacation following college graduation by making deposits at the end of every six months in an annuity that pays \(7 \%\) compounded semiannually. a. How much should you deposit at the end of every six months? b. How much of the \(\$ 4000\) comes from deposits and how much comes from interest?

In order to pay for baseball uniforms, a school takes out a simple interest loan for \(\$ 20,000\) for seven months at a rate of \(12 \%\). a. How much interest must the school pay? b. Find the future value of the loan.