Please help, I need to see how you find the steps to figure out PV,FV ,PMT, I/Y,
ID: 2613019 • Letter: P
Question
Please help, I need to see how you find the steps to figure out PV,FV ,PMT, I/Y, N of each problem
Thank you.
8. Today is Derek’s 25th birthday and he needs to have $5,000,000 in his retirement account on his 65th birthday. In order to achieve this, he will make annual deposits into the account starting on his 26th birthday and ending on his 65th birthday. How much must the annual deposits be? Assume his retirement account will pay 10% interest.( Answer: 11,297.07)
9. Kevin will retire on his 65th birthday. He wants to withdraw $150,000 from his retirement account on each birthday from his 76th to his 85th to cover his living expense. How much will he need in his retirement account on his 65th birthday? Assume interest rate is 10%.( Answer: 355,349)
10. John will retire on his 65th birthday. He wants to withdraw $150,000 from his retirement account on each birthday from his 66th to his 85th to cover his living expense. In addition to these annual withdrawals, he wants to withdraw $500,000 from his account on his 85th birthday to buy a beach house at Florida. How much will he need in his retirement account on his 65th birthday? Assume interest rate is 10%.( Answer: 1, 351,356)
11. A bank offers 12% APR on saving accounts, what is the effective annual rate (EAR) if the interest is compounded monthly? . (Answer: 12.68%)
12. Derek borrows $300,000 to buy a house. He has a 30-year mortgage with a rate of 6.00% APR. Right after making 100 payments, what is the current mortgage balance? (Answer: 261,374)
13. A couple has just purchased a home for $381,523.00. They will pay 20% down in cash, and finance the remaining balance. The mortgage broker has gotten them a mortgage rate of 5.88% APR with monthly compounding. The mortgage has a term of 30 years. What is the monthly payment on the loan?( Answer: 1,806.46)
14. Today is Derek’s 25th birthday and he plans to retire on his 65th birthday. He wants to withdraw$150,000 from his retirement account on each birthday from his 76th to his 85th to cover his living expense. In order to achieve this, he will make annual deposits into the account starting on his 26th birthday and ending on his 65th birthday. How much must the annual deposits be? Assume his retirement account will pay 5% interest. (Answer: 5,886.36)
Explanation / Answer
Answer:11 Effective interest rate=[(1+i)t-1]
=[(1+12%/12)12-1
=12.685%
Answer:13 $1806.46
https://www.creditkarma.com/calculators/loan
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Answer: After making 100 payment current balance is $261,374
Annual payment=386.26
So 100 payment=38626
Remaining balance=300000-38626=261374.
Loan Amount Interest Rates Number of Years Monthly Payments $305,218 5.88% 30 $1,806