QUESTION9 You have got a S5,000 scholarship at KU and would like to make 4 equal

Question

QUESTION9 You have got a S5,000 scholarship at KU and would like to make 4 equal annual deposits into your bank account earning 6% interest per year. How much money will your account have immediately after the 4th deposit if the first deposit is going to be made one year from today? OA $18,150 O B. $22,259 O c, s21 ,873 OD.S28,186 QUESTION 10 You have a fixed mortgage of $800,000 for 25 years. The bank offers you a nominal interest rate of 6% compounded monthly. How much do you need to have for the monthly payments? OA $5,154 OB. $34,160 OC. $48,000 O D.S62,560

Explanation / Answer

9) FV = ? , i = 6% and n = 4

FV = 5000 x (1 + 6%)3 + 5000 x (1 + 6%)2 + 5000 x (1 + 6%) + 5000

FV = $ 21873

10) t = 25 y or 300 months, PV = $ 800000

i = 6% and monthly interest rate = 6%/12 = 0.5%

monthly payments = A

800000 = A/(1 + 0.5%) + A/(1 + 0.5%)2 + ..... + A/(1 + 0.5%)300

A = $ 5154

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