ey for some unexpected expenses, so he borrowed $4,964.33 from a friend and agre
ID: 2824803 • Letter: E
Question
ey for some unexpected expenses, so he borrowed $4,964.33 from a friend and agreed to repay David needed mon the loan in four equal installments of $1,400 at the end of each year. The agreement is offering an implied interest rate of 5.00% David's friend, Keanu, has hired a financial planner for advice on retirement. Considering Keanu's current expenses and expected future lifestyle changes, the financial planner has stated that once Keanu crosses a threshold of $3,729,430 in savings, he will have enough money for retirement. Keanu has nothing saved for his retirement yet, so he plans to start depositing $85,000 in a retirement fund at a fixed rate of 5.00% at the end of each year. It will take years for Keanu to reach his retirement goal.Explanation / Answer
1.
Using financial calculator
N=4
PMT=-1400
PV=4964.33
FV=0
CPT I/Y=5%
So implied rate is 5%
2.
PMT=-85000
I/Y=5%
FV=3729430
PV=0
CPT N=23.80
It will take 23.80 years
Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.