Question

please answer all of the following questions

25. You currently owe $26,000 on a car loan at 4.25 percent interest. If you make monthly payments of $596.59 per month, how long i.e., number of months rounded to one decimal place) will it take you to fully repay the loan? 26. It is now January 1. You plan to make 5 deposits of $300 each, one every 6 months, with the first payment being made exactly six months from today. If the bank pays a nominal interest rate of 12% but uses semiannual compounding, how much will be in your account exactly 12 years from today? 27. You must make a payment of $3,800 exactly 8 years from today. To prepare for this payment, you will make 5 equal deposits into an account that pays a nominal interest rate of 7.6% p.a., with quarterly compounding. If your first deposit is made today and then you make four additional deposits in each of the next four quarters - that is, a deposit 3 months from today, another 6 months from today and so on), what must each of the 5 payments be for you to exactly achieve your goal?

Answer 1

25.

Calculating Time Period,

Using TVM Calculation,

N = [PV = 26,000, FV = 0, PMT = -596.59, I = 0.0425/12]

N = 47.42 months

26.

Calculating Value after 2.5 years,

FV = [PV = 0, PMT = 300, N = 5, I = 0.12/2]

FV = $1,691.13

Future Value = 1,691.13(1.06)¹⁹

Future Value = $5,116.68