Question

please help with the following: show on excel.

Question 3. (2 marks) You invest $28,000 in an account today. The account will pay 7.2% compounded annually. How long will it take until you have $40,000 in the account? 4.88 years 4.94 years 5.13 years 5.20 years none of the above d) Question 4. (2 marks) You have just bought a car for $34,000. You borrowed the purchase price from the bank. The loan has a quoted rate of 8.2% compounded semi- annually and it calls for monthly payments for the next 7 years. The payments are made at the beginning of the month. What is the monthly payment? $529.05 b) $531.00 $527.46 $532.65 None of the above

Answer 1

Rate = rate per period = future amount = fv Present value = pv = NPER = number of a payment periods 7.20% 40000 28000 5.13 NPER(7.2%,,-28000,40000) nper(rate,pmt,-pv,fv) 5.13 Time taken =NPER = Years

Effective annual rate of 8.2% compounded : 8.37% [(1 + 8.2%/2)^2-1] Convert that effective to nominal monthly rate : 8.06% ((0.0837+1)^(1/12)-1)*12 Monthly payment =PMT = PMT: 3.000 14:42 Loan + [(1-(1/(1+r^n /r] 34,000 = [((1-(1/(1.00672184))}/0.00672] $531.00