7)
first we need to convert the quoted interest rate given in the question to monthly interest rate
monthly interest rate = quoted interest rate/ compounding frequency
compounding frequency for monthly compounding = 12 ( no. of months in a year)
then we need to calculate FVIFA or future value interest rate factor of annuity since we are given future value of amount required on retirement
FVIFA = ((1+r)n-1)/r
where , r = monthly interest rate
n = time period in months
then , monthly savings required = amount required on retirement /FVIFA
Questions 7, 8, and 9 needed Verizon LTE 9:23 PM Back AECN 452 Ho... ue: Thursday,...
Questions 8 & 9
Verizon LTE 9:23 PM Back AECN 452 Ho... ue: Thursday, January 24, 2019 l. (3 points) Suppose you have $1,500 you'd like to invest. If you can earn 9% compounded annually for the next three years, how mach will you have at that time? 2 4 points) How does your answer change if compounding occurs more frequently, monthly? How about daily compounding? say 3. (3 points) Using the Rule of 72, how long before your $1,500...
Questions 5-9 needed
Verizon LTE 9:23 PM Back AECN 452 Ho... ue: Thursday, January 24, 2019 l. (3 points) Suppose you have $1,500 you'd like to invest. If you can earn 9% compounded annually for the next three years, how mach will you have at that time? 2 4 points) How does your answer change if compounding occurs more frequently, monthly? How about daily compounding? say 3. (3 points) Using the Rule of 72, how long before your $1,500 doubles...
Question 2-9
Verizon LTE 9:23 PM Back AECN 452 Ho... ue: Thursday, January 24, 2019 l. (3 points) Suppose you have $1,500 you'd like to invest. If you can earn 9% compounded annually for the next three years, how mach will you have at that time? 2 4 points) How does your answer change if compounding occurs more frequently, monthly? How about daily compounding? say 3. (3 points) Using the Rule of 72, how long before your $1,500 doubles to...
Intro You make a one-time investment of $600 and leave it for 5 years, earning an annual interest rate of 9%. B Attempt 1/10 for 8 pts. Part 1 How much interest will you have earned after 5 years? No decimals Submit B Attempt 1/10 for 8 pts. Part 2 If you leave the eitire amount in your account for another 5 years and earn the same interest rate, how much interest will you earn over the second 5-year period?...
Your annual living expenses are $25,000. Assuming that your spending habits don’t change over the next 20 years, and the inflation rate would be 4% per year for that 20 year period, what will be your living expenses 20 years from now? The purpose of this problem is to help you appreciate how large an effect inflation can have over a long period of time, even at a low rate of 4%,. This is compounding working against you for sure...
You have decided to refinance your mortgage. You plan to borrow whatever is outstanding on your current mortgage. The current monthly payment is $2,635 and you have made every payment on time. The original term of the mortgage was 30 years, and the mortgage is exactly four years and eight months old. You have just made your monthly payment. The mortgage interest rate is 6.472% (APR with semi-annual compounding). How much do you owe on the mortgage today? (Note: Be...
Long questions Throughout this question, assume annual interest rate is 3.6% with monthly compounding. You are a loan officer in the mortgage department of a local bank. A customer, who is also a Stevens alum, walks in and applies for a $750,000 loan to buy a starter home in Hoboken. The standard terms your bank have been offering to previous customers are as followed, • Contract A: a 15-year fixed rate loan, with an annual rate of 3.6% and with...
You have applied for a job with a local bank. As part of its evaluation process, you must take an examination of the time value of money following questions. Please show your work. (Identify N. IV, PV, PMT, and PV) icon the 1. What's the future value of $100 after 3 years if it earns M. annual compounding? 2. What's the present value of $100 to be received in 3 years of the interest rate is 8. annual compounding 3....
5) a) What is the present value of $40 earned 2-years from now if compounding was semi-annual and the interest rate is annually 3%? A "black box" just paid $20, which is expected to grow by 3% when the interest rate is 7% forever, what is the present value of this "black box" b) What is the future value of an annuity due with a $15 cash flow, 4% annual interest with quarterly compounding three-years from now? c) d) If...