Question

1. The Johnsons have accumulated a nest egg of $40,000 that they intend to use as a down payment toward the purchase of a new house. Because their present gross income has placed them in a relatively high tax bracket, they have decided to invest a minimum of $2300/month in monthly payments (to take advantage of the tax deduction) toward the purchase of their house. However, because of other financial obligations, their monthly payments should not exceed $2900. If local mortgage rates are 5.5%/year compounded monthly for a conventional 30-year mortgage, what is the price range of houses that they should consider? (Round your answers to the nearest cent.)

least expensive | $ |

most expensive |

2. Lauren plans to deposit $8000 into a bank account at the
beginning of next month and $150/month into the same account at the
end of that month and at the end of each subsequent month for the
next 5 years. If her bank pays interest at a rate of 3%/year
compounded monthly, how much will Lauren have in her account at the
end of 5 years? (Assume she makes no withdrawals during the 5-year
period. Round your answer to the nearest cent.)

$

3. Luis has $190,000 in his retirement account at his present
company. Because he is assuming a position with another company,
Luis is planning to "roll over" his assets to a new account. Luis
also plans to put $3000/quarter into the new account until his
retirement 30 years from now. If the new account earns interest at
the rate of 4.5%/year compounded quarterly, how much will Luis have
in his account at the time of his retirement?
**Hint:** Use the compound interest formula and the
annuity formula. (Round your answer to the nearest cent.)

$

Answer #1

The Johnsons have accumulated a nest egg of $40,000 that they
intend to use as a down payment toward the purchase of a new house.
Because their present gross income has placed them in a relatively
high tax bracket, they have decided to invest a minimum of
$2600/month in monthly payments (to take advantage of the tax
deduction) toward the purchase of their house. However, because of
other financial obligations, their monthly payments should not
exceed $2900. If the Johnsons...

The Johnsons have accumulated a nest egg of $30,000 that they
intend to use as a down payment toward the purchase of a new house.
Because their present gross income has placed them in a relatively
high tax bracket, they have decided to invest a minimum of
$1100/month in monthly payments (to take advantage of the tax
deduction) toward the purchase of their house. However, because of
other financial obligations, their monthly payments should not
exceed $1400. If the Johnsons...

The Johnsons have accumulated a nest egg of $50,000 that they
intend to use as a down payment toward the purchase of a new house.
Because their present gross income has placed them in a relatively
high tax bracket, they have decided to invest a minimum of
$2100/month in monthly payments (to take advantage of the tax
deduction) toward the purchase of their house. However, because of
other financial obligations, their monthly payments should not
exceed $2400. If the Johnsons...

The Johnsons have accumulated a nest egg of $50,000 that they
intend to use as a down payment toward the purchase of a new house.
Because their present gross income has placed them in a relatively
high tax bracket, they have decided to invest a minimum of
$2900/month in monthly payments (to take advantage of the tax
deduction) toward the purchase of their house. However, because of
other financial obligations, their monthly payments should not
exceed $3500. If local mortgage...

The Johnsons have accumulated a nest egg of $50,000 that they
intend to use as a down payment toward the purchase of a new house.
Because their present gross income has placed them in a relatively
high tax bracket, they have decided to invest a minimum of
$2300/month in monthly payments (to take advantage of the tax
deduction) toward the purchase of their house. However, because of
other financial obligations, their monthly payments should not
exceed $2900. If local mortgage...

Luis has $120,000 in his retirement account at his present
company. Because he is assuming a position with another company,
Luis is planning to "roll over" his assets to a new account. Luis
also plans to put $2000/quarter into the new account until his
retirement 20 years from now. If the new account earns interest at
the rate of 3.5%/year compounded quarterly, how much will Luis have
in his account at the time of his retirement?
Hint: Use the compound...

Luis has $120,000 in his retirement account at his present company.
Because he is assuming a position with another company, Luis is
planning to "roll over" his assets to a new account. Luis also
plans to put $3000/quarter into the new account until his
retirement 30 years from now. If the new account earns interest at
the rate of 3.5%/year compounded quarterly, how much will Luis have
in his account at the time of his retirement? Hint: Use the
compound...

Luis has $180,000 in his retirement account at his present
company. Because he is assuming a position with another company,
Luis is planning to "roll over" his assets to a new account. Luis
also plans to put $3000/quarter into the new account until his
retirement 20 years from now. If the new account earns interest at
the rate of 2.5%/year compounded quarterly, how much will Luis have
in his account at the time of his retirement?
Hint: Use the compound...

Luis has $110,000 in his retirement account at his present
company. Because he is assuming a position with another company,
Luis is planning to "roll over" his assets to a new account. Luis
also plans to put $3000/quarter into the new account until his
retirement 25 years from now. If the new account earns interest at
the rate of 5.5%/year compounded quarterly, how much will Luis have
in his account at the time of his retirement?
Hint: Use the compound...

Luis has $170,000 in his retirement account at his present
company. Because he is assuming a position with another company,
Luis is planning to "roll over" his assets to a new account. Luis
also plans to put $3000/quarter into the new account until his
retirement 20 years from now. If the new account earns interest at
the rate of 2.5%/year compounded quarterly, how much will Luis have
in his account at the time of his retirement?
Hint: Use the compound...

ADVERTISEMENT

Get Answers For Free

Most questions answered within 1 hours.

ADVERTISEMENT

asked 1 minute ago

asked 1 minute ago

asked 2 minutes ago

asked 3 minutes ago

asked 7 minutes ago

asked 25 minutes ago

asked 25 minutes ago

asked 33 minutes ago

asked 33 minutes ago

asked 44 minutes ago

asked 49 minutes ago

asked 56 minutes ago