eginning three months from now, you want to be able to withdraw $2,400 each quar

Question

eginning three months from now, you want to be able to withdraw $2,400 each quarter from your bank 3ccount to cover college expenses over the next three years. If the account pays 0.46 percent interest per quarter, how much do you need to have in your bank account today to meet your expense needs aver the next three years? (Do not round intermediate calculations and round your final answer to 2 decimal places. (e.g., 32.16)) You are planning to save for retirement over the next 30 years. To do this, you will invest $830 a month n a stock account and $430 a month in a bond account. The return of the stock account is expected to e 10.3 percent, and the bond account will pay 6.3 percent. When you retire, you will combine your money into an account with a 7.3 percent return. How much can you withdraw each month from your account assuming a 25-year withdrawal period? (Do not round intermediate calculations and round your final answer to 2 decimal places. (e.g., 32.16)) Withdrawal S per month First National Bank charges 13.9 percent compounded monthly on its business loans. First United Bank charges 14,2 percent compounded semiannually. Calculate the EAR for First National Bank and First United Bank. (Do not round intermediate calculations and round your final answers to 2 decimal places. (e.g., 32.16)) As a potential borrower, which bank would you go to for a new loan? First National Bank First United Bank

Explanation / Answer

1) To calculate PV of an annuity.

PV of cash flows = PMT * [{1

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