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Annuities and Amortization

Annuities and Amortization. Formulas. Ordinary Annuity Formula.

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Annuities and Amortization

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  1. AnnuitiesandAmortization

  2. Formulas Ordinary Annuity Formula

  3. John Smith recently set up a tax-deferred annuity to save for his retirement. He arranged to have $50 taken out of each of his biweekly checks; it will earn annual interest. He just had his thirtieth birthday, and his ordinary annuity comes to term when he is sixty-five. Find the following: • the future value of the account • John’s total contribution to the account. • the total interest

  4. Formulas Simple Interest Amortized Loan Formula

  5. Formulas Unpaid Balance Formula T is the number of years from the beginning of the loan to the present

  6. Shirley bought a house for $187,600. She put 20% down and obtained a simple interest amortized loanfor the balance at for 30 years. • Find her monthly payment. • Find the total interest. • Prepare an amortization schedule for the first two months of the loan.

  7. Shirley bought a house for $187,600. She put 20% down and obtained a simple interest amortized loanfor the balance at for 30 years. • 20 years have passed and Shirley wants to pay off the balance on her house. If there is no pre-payment penalty, what will it cost for Shirley to pay off the unpaid balance of her home loan?

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