1. Jenny\'s New year\'s resolution is to start a retirement fund . She has opene

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1. Jenny's New year's resolution is to start a retirement fund . She has opened an account with a local broker by depositing $1000 in an investment fund. In the future she plans to invest $500 monthly into the fund. The investment funds averages a return of 6% APR with monthly compounding
a What will she have available for retirement after 30 years?
b If Jenny wants a retirement fund of $1 million when she retires in 30 years, how much will she have to invest each month with everything else the same?














2. Honest John's Car Dealership needs an easy way to determine monthly payments for customers who are inquiring about cars. John wants a spreadsheet the will allow salespeople to enter the price of the car, the customer's down payment, length of the loan in years, and the APR (monthly compounding). For any values of these, the spreadsheet should automatically display the monthly payment. Prepare this spreadsheet.
Juan is evaluating his retirement plan. He estimates that he will have saved $750,000 when he retires in an account that earns at an APR of 4.00% compounded monthly. He plans to withdraw $60,000 annually at the end of each year after retiring. a How many years will Juan's funds last? b To make the funds last 30 years, what APR (with monthly compounding) will he need? Solution
















Pat Davis has $750,000 in a retirement fund. Pat plans to start taking out funds at the end of the coming year. He expects that as he ages, he will need less money each year. His plan is to take out 12 monthly payments of $10,000 in the first year. In the second year he would take out 5% less or 12 payments of $9,500. Each year thereafter the payments would be similarly reduced by 5% less than the previous year, etc. The fund earns interest at a rate of 4% EAR.
a How much will be in the fund at the end of five years. b How long will the funds last for Pat with this scheme?







Solution

















































1. Jenny's New year's resolution is to start a retirement fund . She has opened an account with a local broker by depositing $1000 in an investment fund. In the future she plans to invest $500 monthly into the fund. The investment funds averages a return of 6% APR with monthly compounding
a What will she have available for retirement after 30 years?
b If Jenny wants a retirement fund of $1 million when she retires in 30 years, how much will she have to invest each month with everything else the same?














2. Honest John's Car Dealership needs an easy way to determine monthly payments for customers who are inquiring about cars. John wants a spreadsheet the will allow salespeople to enter the price of the car, the customer's down payment, length of the loan in years, and the APR (monthly compounding). For any values of these, the spreadsheet should automatically display the monthly payment. Prepare this spreadsheet.
Juan is evaluating his retirement plan. He estimates that he will have saved $750,000 when he retires in an account that earns at an APR of 4.00% compounded monthly. He plans to withdraw $60,000 annually at the end of each year after retiring. a How many years will Juan's funds last? b To make the funds last 30 years, what APR (with monthly compounding) will he need? Solution
















Pat Davis has $750,000 in a retirement fund. Pat plans to start taking out funds at the end of the coming year. He expects that as he ages, he will need less money each year. His plan is to take out 12 monthly payments of $10,000 in the first year. In the second year he would take out 5% less or 12 payments of $9,500. Each year thereafter the payments would be similarly reduced by 5% less than the previous year, etc. The fund earns interest at a rate of 4% EAR.
a How much will be in the fund at the end of five years. b How long will the funds last for Pat with this scheme?







Solution

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