Question

4. [0/4 Points] DETAILS PREVIOUS ANSWERS Frad wants to take out a loan. Suppose he can afford to make monthly payments of 600 dollars and the bank charges interest at an annual rate of 6 percent, compounded monthly What is the maximum amount that Fred could afford to borrow if the loan is to be paid off eventually? (Give your answer, in dollars, correct to the nearest dollar) amount he can borrow = [0/4 Points) DETAILS PREVIOUS ANSWERS Derek wants to retire in 30 years time, and so decides to start a new retirement savings account. He wants to accumulate 400000 dollars by the time he retires. Initially, Derek deposits 1000 dollars into the account. He will make further deposits at the end of each month. The account will earn interest at annual rate 8 percent, compounded monthly How much will he have to deposit into the account each month in order to reach this target after 30 years? (Give your answer, in dollars, correct to the nearest cent.) monthly deposit: Submit Answer 5.0/5 points) DETAILS PREVIOUS ANSWERS Carolyn has just retired, and has 1000000 dollars in her retirement account. The account will earn interest at an annual rate of 5 percent, compounded monthly At the end of each month, Carolyn will withdraw a fixed amount to cover her living expenses Carolyn wants her savings to last exactly 25 years. How much money can she withdraw each month (Give your answer in dollars, correct to the nearest cent.) monthly withdrawal: What is the maximum amount that Carolyn can withdraw each month if she wants her savings to last indefinitely monthly withdrawal

Answer 1

4. PE payment at the end of each month $ 600 ia monthly date of interest' = 60 = 0.51 maximum amount that fred Present Value of Could afford to borrow Perpetuity 12 PU of perpetuity P 600 0.5% = $ 120,000 5. 12 no 30 X 125 360 I = P deposit at the end of each month is monthly sale of interest '= = 0.674 number of months deposit made by Dedek initially = $ 1000 Accumulated value by the time of retirement $ 400000 Accumulated value - FV_of initial deposit_+_ fl_ of annuity 400.000 1000 [1+0.64.14) +0.671 0.6704 1000 (1-0067200 t (1.0067,260_ 400,000 10,935.73 + P[1490-36) ܘܘ 360 360 360 . 400,000 P Р 00060 P 400,000 10.935. Y3 1490,36 $261.05

25X12 = 300 6. Pe withdrawal_made at the end of each month ie monthly tale of calcest = get = -0.0042 n = number of months = PV of annuity - Amountio dedismant account: $1000.000 pr (+i) illti)" 300 (1.0042) 0.0042 (1.0042190 Pu of annuity 1000000 P 300 Jood ovo P (141:06) 1oooooo 171-06 $5,845.90 → Amount in her retirement account = PV of perpetuity = $. 10000 Р 원 i Pu of perpetuity وم 1000 000 P 0.004166 i P Р 1000000 X 0.00416 6 $_4166.67