it is about Simple Interest Present Value 1-Ramon needs $25,000 at the end of 6
ID: 2713328 • Letter: I
Question
it is about Simple Interest Present Value
1-Ramon needs $25,000 at the end of 6 months for a down payment on a new house. What amount should he deposit today in an account paying 3.6% simple interest in order to reach his goal?
2-Find the amount Jose should deposit today in order to have $5,000 in his account 6 years from now if the account earns 4% simple interest.
3-Bonnie wants to have $3,000 in her account in 10 years. Find the amount she should deposit today in order to reach her goal if the account earns 3% simple interest.
4-Chuck will pay $8,000 to retire a loan after 2 years. If the principal and interest are repaid in one lump sum, how much did Chuck originally borrow at 2.4% simple interest?
5-Find the amount Scooter should deposit today if he wants $1,000 in his account in 8 years. Assume an interest rate environment of 3% simple interest.
Explanation / Answer
1. REequired amount=25000/1.018=$24557.96
2.Required Amount=5000/1.04^6=$3951.57
3.Required Amount=$3000/1.03^10=$2232.28
4.Loaned Amount=8000/1.024^2=$7629.40
5.Amount required=1000/1.03^8=$789.41
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