18. What is the interest rate of a 6-year, monthly $625 annuity due with a present...
18. What is the interest rate of a 6-year, monthly $625 annuity due with a present value of $37,654?
19. After saving diligently her entire career, Terrence is ready to
retire with a nest egg of $672,500. She needs to invest this money
in a mix of stocks and bonds that will allow her to withdraw $5,850
per month for 20 years. What annual interest rate (APR) does she
need to earn?
20. Bradley borrowed $72,500 in student loans and he has just
graduated from Elon University. He earns enough at his new job to
allow him to pay $575 per month on the loan. If the annual rate on
the student loan is 4.38% (compounded monthly), how long will it
take Bradley to pay off his student loans? Specify the number of
months to the nearest whole number.
Homework Answers
18. Let the monthly interest rate be r.
Therefore, by present value of annuity formula:
Solving using equation solver, we get:
r = 0.005
Therefore, yearly interest rate = 0.005*12 = 0.06 = 6%
I can only answer 1 question at a time so I am solving question 18. Please do rate me and mention doubts in the comments section.
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18. What is the interest rate of a 6-year, monthly $625 annuity
due with a present...
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