stipulates that the closing cost must be pala in cash and canhot be part of the
ID: 2795428 • Letter: S
Question
stipulates that the closing cost must be pala in cash and canhot be part of the hew foan.lakimg e chob cost into account, determine whether you would save or lose money, in interest, if you were to refinance your home. Show all your work. Label and give brief explanations of the steps that you used to solve this problem. When you use the TVM Solver, show all the variables, the values you entered, and underline the variable you solved for. Your final answer sho (20 points) uld be in the form of two or three sentences that summarize your findings. lem 2 You are working for a finance firm, and a client comes to you and wants to know how much money they should put in an annuity (which earns 2.0789% interest compounded monthly) at the end of each month for the next 42 years. Their goal is that when they retire at the end of 42 years, they would like the monthly withdrawals from the annuity to total $41,257.44 per year and last for the next 25 years. Do the following: A. Determine the amount your client needs to deposit into the annuity at the end of each month for the next 42 years so that they can meet their retirement goal. Show all your work. Label and give brief explanations of the steps that you used to solve this problem. When you use the TVM Solver, show all the variables, the values you entered, and underline the variable you solved for. (10 points) Find the total amount of interest the client will earn (from the time they start contributing to the account to when they make the last withdrawal). Show how you arrived at your answer. (3 points) B.Explanation / Answer
Annual Monthly Interest 2.0789% 0.17324% Years 42 504 Deposit Withdraw 41257.77 3438.148 Years 25 300 If want to receive 3438.148 monthly for 25 years Monthly Withdrawal fro 25 years 3438.15 Principal x Rate of Interest 2.0789% 0.17324% Per Month Years 25 300 months Monthly Withrawal= =(x*.17324%*(1+.17324%)^300)/((1+.17324%)^300-1) By solving this x=803,855 Monthly deposit y so that it become $805,855 after 42 years FV = P * {(((1+R)^N) - 1) / R} P y R 0.17324% N 504 Months =y*((((1+.17324%)^504)-1)/.17324%) by Solving this y=1000.01 per month B total Interest Earned Monthly contribution 1,000.01 No of Months 504.00 Total contribution 5,04,005.04 Total Wtihdrawals Monthly Withdrawal 3438.15 no of months 300.00 Total Withdrawals 10,31,445.00 Total Interest Earned =total wothdrawal-total deposit =1031445-504005.04 5,27,440
Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.