f you wish to have $250,000 in a savings account at the end of 10 years and you
ID: 2418162 • Letter: F
Question
f you wish to have $250,000 in a savings account at the end of 10 years and you expect the account to earn a nominal rate of 6% per year compounded monthly how much will you need to deposit per month?
b. If Miss Taylor finances $200,000 for a home at a nominal rate of 5.3% compounded monthly for 30 years, what will her monthly payment be?
c. A company wishes to make an investment now that is expected to generate a profit of $20,000 next year and decrease by $500 each year thereafter for a total of 20 years. How much should the company be willing to invest if they prefer to earn 10% per year on their investments?
d. Suppose I invest $10,000 today and would like to have $20,000 five years from now. What interest must I earn per year?
Explanation / Answer
A) rate of interest 6% principal 250000 no of years 10years Principal ? Principal 150000 B) Loan Amount 200000 Rate of Interest 5.3% PA no of years 30 years Monthly Interest ? Monthly interest 883.33 C) Rate of Return 10% on their invoices Next year Profit 20000 Intial Investment ? Intial Investment 200000 D) Intial Investment 10000 Principal 20000 No of years 5 Rate of interest ? Rate of interest 10000/(20000*5) 10%
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