Question

An investor wants to determine how much interest he must earn to be able to make the payments on a 10-year mortgage which has increasing annual The problem is summarized in the accompanying spreadsheet. The investor has enough money to make an initial investment of $9,000 and hopes he can earn 12%, compounded quarterly, on his investments. He would like to know how low his annual return can be and still allow him to make his payments from interest income. What formula goes in cell C7 of the spreadsheet? 2 Amount Invested 3 Annual Retum $9,000 10% | Begnning | Investment Earnings | Premium Ending | Eamin Balance 9,199 9.380 $9,543 9,691 $9,837 9,966 $10,068 10,155 $10,207 $10,207 Year Balance $9,000 9,199 $9,380 9,543 $9,691 9,837 9 966 $10,068 $10,155 $10,207 s After Taxes 500 5534 $566 593 $607 S635 $672 $695 $737 $793 $971 $993 $1,012 699 715 $729 $741 $753 $764 $774 $782 $789 $793 1.030 S1,046 $1,061 1,075 $1,086 10 12 14 1,096 1,101 16 10 O-B7"($C$3/4)^4-B7

Answer 1

The correct answers are as below:

1) B7*(1+$C$3/4)^4 - B7

2) $D$7:$D$16>=$E$7:$E$16