Question

Please **show your steps** for each part of the
problem, and if a **calculator** was used, list the
**button combination** pressed in order to arrive at
your answer!

**a**. Jack and Jill are twins and at 20 years of
age they both opened separate investment accounts with an on online
broker. Jack started investing $50 a month starting from today.
Jill will save $55 a month starting at the end of the month. if
this investment account gives them 8% annual return on investment,
how much money will each have accumulated when they both retire at
age 65?

**b**. You have saved up for retirement in an
annuity account. This account earns a return of 7% on annual basis
but compounded monthly. You are due to retire in 6 years from now.
You will receive monthly payments of $2,400 at the end of each
month after retiring, for 15 years. How much have you saved up in
this account today?

**c**. Two banks are competing to give a loan to
you for $150,000 with 30-year term to maturity, bank a is offering
6% with quarterly compounding while bank b is offering 5.98% with
daily compounding. Which bank should you take the loan from?
Support your answer with calculations.

**d**. A contract requires you to make a payment of
$2,500 immediately upfront and additional three payments of $500
each at the end of next three years. If interest rate on this
investment is 8.5%, calculate the present value of the
contract?

Answer #1

a)

Please show what to enter on financial calculator to
find the answer.
Currently, I have $2,500 in my bank account that pays 6% APR
with monthly compounding. In order to have $12,000 in this account
in 5 years, how much money should I add to this account each month
starting from next month?

Please answer all parts of problem :)
a) You borrowed $3,000 with "Add-on Interest" at 9% with 12
equal monthly payments to payoff the loan. What is the actual
interest rate the lender is charging you in this deal.
Choose the correct answer:
9%
13.51%
12.48%
10.15%
16.22%
b) XYZ Inc entered in a 4 year contract with a client. XYZ will
receive following cash flows at the end of each year. If they can
earn 6% annual interest, what...

Assume that today is the first day of the month and that it is
also your first day of retirement. You have saved for retirement
over the years and have accumulated $499,000 in an investment
account from which you plan to make monthly withdrawals during your
retirement starting at the end of this month. Assuming you can earn
annual returns of 7.5% in your investment account during your
retirement years, how much money can you withdraw every month to
make...

Please show the below problem in Excel:
John and Peggy would like to buy a house. They
have looked at their budget and determined that
they can afford a maximum monthly mortgage
payment of $1,100. Interest rates on 30-year,
fixed-rate mortgages currently have a nominal
annual interest rate of 7 percent with monthly
compounding (payments due at the end of each
month). Given these loan terms, what is the
maximum amount John and Peggy borrow today
to purchase a house...

Question 2. You have approached Commonwealth Bank for a loan to
buy a house. The bank offers you a $500 000 loan, repayable in
equal monthly instalments at the end of each month for the next 30
years. Required: a. If the interest rate on the loan is 4.5% per
annum, compounded monthly, what is your monthly repayment (to the
nearest dollar)? b. What is your weekly payment if you wish to pay
weekly instalments and the interest rate is...

PART 2 - HOMEWORK 3 - Time Value of Money (30
pts)
Please use Excel
to answer the following questions. Print an Excel spreadsheet that
presents your answers to these TVM questions and also print the
formula sheet that shows how you calculated your
answers.
1
Calculate
the present value of 120 monthly payments of $300 at an annual
rate of 8%.
The payments are made at the end of each month.
2
You are
financing a new car with...

Q1: Jill wants to buy a car but needs to calculate how much she
can afford to borrow. The maximum she can repay each month-end is
$560 per month and the bank has indicated it will charge a fixed
8.0% p.a compounding monthly. If she takes a loan for 5 years how
much can she afford to borrow? (Do not use the $ sign or commas;
include cents e.g 24500.09)
Q2: Payments of $200 per month are deposited into a...

Suppose you are 30 years old and want to retire at the age of
age 70 and expect to live another 20 years. On the day you retire,
you want to have $1,000,000 in your retirement savings
account.
i. If you invest monthly starting one month from today and your
investment earns 6.0 percent per year, How much money do you need
to invest every month until you retire?
ii. Now you’re retired with $1,000,000 and you have 20 more...

Excel retirement problem:
You just got your first job and plan to start saving for
retirement by investing with each monthly paycheck.
You plan to retire in 45 years.
In 50 years, you want to give your daughter a gift of
$1,000,000. You will receive an inheritance from a rich
great-uncle of $250,000 in 20 years.
You think you will want $150,000 every year when you retire,
starting the day you retire. You plan to...

1.You are 18 today want to retire at age 65.
Starting with the day of your retirement, you would like to have an
annuity initially in the amount of $35,000 per year (but growing at
a 3% annual rate) for 35 years. You
will inherit $30,000 from your long lost uncle when you turn 34 and
save that money as part of your financial plan. Assume an interest
rate of 7% for all periods? How much must you put into...

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