Interactive practice questions
When James was born, his parents set up a trust fund to help him pay for his university education. James’s parents opened an account earning $5.3%$5.3% per annum compounded annually. They deposit $\$300$$300 at the end of each year, with the first amount deposited on James's first birthday.
We will use the finance facility on your calculator to determine how much is in James’s account after his $18$18th birthday.
Fill in the value for each of the following. Type an $X$X next to the variable we wish to solve for.
| $N$N | $\editable{}$ |
| $I$I$%$% | $\left(\editable{}\right)%$()% |
| $PV$PV | $\editable{}$ |
| $PMT$PMT | $\editable{}$ |
| $FV$FV | $\editable{}$ |
| $P$P$/$/$Y$Y | $\editable{}$ |
| $C$C$/$/$Y$Y | $\editable{}$ |
Hence determine the amount in James’s account after his $18$18th birthday.
Give your answer to the nearest cent.
To save up to buy a car, Roxanne opens a savings account that earns $7%$7% per annum compounded monthly. She initially deposits $\$1600$$1600 when she opens the account at the beginning of the month, and then deposits $\$125$$125 at the end of every month.
We will use the finance facility on our calculator to determine how much money Roxanne has saved after $2$2 years.
To save up for a garden renovation, Luke and Vanessa open a savings account. They intend to have enough money to renovate their garden in $4$4 years time.
We will use the finance facility on our calculator to determine how much they should deposit each quarter if the account earns $6%$6% p.a. compounded quarterly and they need to save $\$26000$$26000.
Aaron is saving for a deposit to buy a house. He can initially afford to deposit $\$11000$$11000, thanks to a donation from his parents, and will then make deposits of $\$1200$$1200 at the end of each month. He wants to choose a savings account that is compounded monthly.
We will use the finance facility on our calculator to determine what annual interest rate he should look for if he wishes to have a total of $\$90000$$90000 in $5$5 years' time.