# Calculation of Interest, Principal, and Payments

## Examples of how to use the different calculations

### Simple Interest

A company borrows \$5,000 at 5 percent per annum simple interest. What payment must be made to retire the debt at the end of 8 years?

### Compound Interest; Future Value of Single Payment

The sum of \$3,000 was deposited in a fund that earned interest at 2 percent compounded quarterly. What was the principal in the fund at the end of 12 quarters?

### Present Worth of Single Payment

A deposit was made in a fund that earns interest at 6 percent per annum. Five years later, the principal resulting from this deposit was \$23,212. What sum was deposited?

### Principal in Sinking Fund

A deposit of \$200,000 was made each year for 8 years in a fund earning interest at 6 percent per annum. What was the principal in the fund immediately after the last deposit was made?

### Determination of Sinking-Fund Deposit

A company has to repay \$100,000 at the end of 6 years. To accumulate this sum, the company will make 6 equal annual deposits in a fund that earns interest at 3 percent, the first deposit being made 1 year after negotiation of the loan. What is the amount of the annual deposit required?

### Present Worth of a Uniform Series

What is the present worth of 12 annual payments of \$8,000 each?

### Capital-Recovery Determination

A company decides to allot \$32,000 by making a series of equal payments 4 times a year for 6 years. If the account earned interest at 3 percent compounded quarterly, what is the amount of the periodic payment?

a