# compounding interest and value of annuity

1. What is the ending balance from an initial deposit of $4,250 at 12% compounded quarterly for 6 years?

2. Find the present value of $5,000 in 5 years at 10% compounded annually.

3. Find the value of an annuity in which $1,100 is deposited at the end of each year for 5 years, at an interest rate of 11.5% compounded annually.

4. Determine the amount of each payment to be made to a sinking fund in order to pay off a $120,000 loan in 8 1/2 years when the funds earn interest at a rate of 10% compounded semiannually.

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#### Solution Summary

The solution is comprised of detailed explanations on the calculation of present or future values of the annuity with compounding interest (see attachment).

$2.19