Deferred Annuity

Word Problems

1. Find the future value and the present value of an annuuity of 15,000 payable at the end of every
three months for 30 payments. The first payment is due at the end of seven years. The interest
rate is 11% compounded quarterly.

2. Binnie Blanche purchased a dining set for 80,000 on May 13, 2017. She paid 10,000 cash and
agreed to pay the balance plus interest at 9 ½% compounded annually in 14 annual payments,
with the first payment due on May 13, 2020. What is the size of each payment?

3. Bellamy borrowed 65,000 at 7% interest compounded quarterly and agreed to repay the loan in
quarterly payments of 5,000 each. The first payment is due in two years. Find the number of
payments.

4. If money is worth 5 ½% compounded annually, what single payment now equivalent to 45

annual payments of 35,000 each with the first payment due in five years?