Question

QUESTION 8 If you can't start saving that early in your career, you will need to save more each month. How much would you need to save each month during the last 30 years of your career to have $700,000 when you retire? (Still assuming your retirement account earns an APR of 4%.) QUESTION 9 If they have $57,000 combined student loans with an APR of 5.5%, what size monthly payment would pay off these loans after 15 years?

Answer 1

Number of Months =30*12 =360
Rate per month =4%/12
Amount needed to be saved each year FV/((1+r)^n-1)/r =700000/(((1+4%/12)^360-1)/(4%/12)) =1008.75

PV of Loan =57000
Rate per month =5.5%/12
Number of months =15*12 =180
Monthly Payment =PV/((1-(1+r)^-n)/r) =57000/((1-(1+5.5%/12)^-180)/(5.5%/12))=465.74