Question

A sum of money invested at 6% for every 6 months period will double in how...

A sum of money invested at 6% for every 6 months period will double in how many years?

A man is retiring with 250,000 in the bank. He plans on spending 30,000 per year for the rest of his life. What interest does he need?

You deposit 2000 into a savings account that earns 12% compounded quarterly for 2 years find f at the end of year 2. F is most nearly?

A savings account earns 7% interest. if 2000 is invested, how many years will it take for the amount to be 2360?

Mike borrows 3000 from his friend he repays her 4000. What was the interest rate paid at the end of the year?

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Homework Answers

Answer #1

As per rules I am answering the first 4 subparts of the question

1: Using financial calculator

Input: PV =-100

I/Y = 6

FV = 200

Solve for N = 11.9

This is number of semiannual periods.

Hence Number of years = 11.9*2 = 23.79 years

2: The answer depends upon the number of years he lives. Suppose he lives for 20 years after retirement.

Using financial calculator

Input: PV = -250000

PMT = 30000

N = 20

Solve for I/Y = 10.32

Hence rate = 10.32%

3: Using financial calculator

Input: PV = -2000

I/Y = 12/4 = 3

N = 2*4 = 8

Solve for Fv = 2,533.54

4: Using financial calculator

Input: PV =-2000

I/Y = 7

FV = 2360

Solve for N= 2.45

It will take 2.45 years.

5:

Using financial calculator

Input: PV = -3000

FV= 4000

N = 1

Solve for I/Y = 33.33

Rate = 33.33%

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