Question

FINANCE

5.

5A.

You deposit $5000 in an account earning 8% interest compounded
monthly. How much will you have in the account in 15
years?

5B.

You can afford a $350 per month car payment. You've found a 3
year loan at 2% interest. How big of a loan can you
afford?

5C.

You have $300,000 saved for retirement. Your account earns 5%
interest. How much will you be able to pull out each month, if you
want to be able to take withdrawals for 15 years?

5D.

Suppose you want to have $700,000 for retirement in 35 years. Your account earns 4% interest. How much would you need to deposit in the account each month?

5E.

Suppose you want to have $700,000 for retirement in 35 years. Your account earns 4% interest. How much would you need to deposit in the account each month?

Answer #1

Rate per month =8%/12

Number of months =15*12 =180

FV =PV*(1+r)^n =5000*(1+8%/12)^180 =16534.61

5B. PMT =350

Rate per month =2%/12

Number of months =3*12 =36

Amount of loan you can afford =PMT*((1-(1+r)^-n)/r)
=350*((1-(1+2%/12)^-36)/(2%/12))=12219.57

5C. PV of retirement =300000

Rate per month =5%/12

Number of months =15*12 =180

Amount per month =PV/((1-(1+r)^-n)/r
=300000/((1-(1+5%/12)^-180)/(5%/12))=2372.38

5D. FV =700000

Number of months =35*12 =420

Rate per month =4%/12

Amount of monthly deposit =FV/((1+r)^n-1)/r)
=700000/((1+4%/12)^420-1)/(4%/12))=766.09

5E. FV =700000

Number of months =35*12 =420

Rate per month =4%/12

Amount of monthly deposit =FV/((1+r)^n-1)/r)
=700000/((1+4%/12)^420-1)/(4%/12))=766.09

6. You deposit $400 each month into an account earning 5%
interest compounded monthly.
a) How much will you have in the account in 35 years?
b) How much total money will you put into the account?
c) How much total interest will you earn?
7. Suppose you want to have $500,000 for retirement in 25 years.
Your account earns 7% interest.
a) How much would you need to deposit in the account each
month?
b) How much interest will...

You deposit $300 each month into an account earning 5% interest
compounded monthly.
a) How much will you have in the account in 30 years?
$
b) How much total money will you put into the account?
$
c) How much total interest will you earn?
$

You deposit $150 each month into an account earning 5% interest
compounding monthly.
a) How much will you have in the account in 35 years?
b) How much total money will you put in the account?
c) How much total interest will you earn?

1/ You deposit $3000 at the beginning of each year into an
account earning 5% interest compounded annually. How much will you
have in the account in 20 years?
2/Suppose you want to have $400,000 for retirement. Your account
earns 7% interest compounded monthly. If you deposit $200 at the
end of each month, how long will it take you to reach your goal?
Round to the nearest year.

You deposit $500 each month into an account earning 4%
interest compounded monthly. How much will you have in the account
in 30 years? How much total money will you put into the account?
How much total intrest will you earn?

You deposit $300 each month into an account earning 2% annual
interest compounded monthly
A. How much money will you have in your account in 35 years?
B. How much total money will you put into the account ?
C. How much total interest will you earn?

You have $500,000 saved for retirement. Your account earns 5%
interest. How much will you be able to pull out each month, if you
want to be able to take withdrawals for 20 years?

You deposit $2000 in an account earning 3% interest compounded
monthly
How much will you have in the account in 20 years?
How much interest will you earn?
You deposit $10,000 in an account earning 4% interest compounded
monthly.
How much will you have in the account in 25 years?
How much interest will you earn?

Suppose you want to have $300,000 for retirement in 35 years.
Your account earns 6% interest.
a) How much would you need to deposit in the account each
month?
$
b) How much interest will you earn?
$

1) You deposit $500 each month into an account earning 3%
interest compounded monthly.
a) How much will you have in the account in 25 years?
b) How much total money will you put into the account?
c) How much total interest will you earn?
2) Suppose you invest $190 a month for 6 years into an account
earning 7% compounded monthly. After 6 years, you leave the money,
without making additional deposits, in the account for another 21
years....

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