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Your goal is to create a college fund for your child. Suppose you find a fund that offers an APR of 4 %. How much should you deposit monthly to accumulate ​$80,000 in 12 ​years?

 Apr 1, 2020
edited by Guest  Apr 1, 2020
 #1
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FV=80000; R=0.04/12; N=12*12;PMT = FV*(((1 + R)^N - 1)^-1* R);print" PMT =$",PMT

 

 PMT =$ 433.76

 Apr 1, 2020
 #2
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Would you be willing to help me with the rest of my homework?

Guest Apr 1, 2020
 #4
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Post your questions ONE at a time. Will see if we can help.

Guest Apr 1, 2020
 #3
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You want to purchase a new car in 8 years and expect the car to cost ​$85,000. Your bank offers a plan with a guaranteed APR of 4.5% if you make regular monthly deposits. How much should you deposit each month to end up with ​$85,000 in 8​ years?

 Apr 1, 2020
 #6
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FV=85000; R=0.045/12; N=12*8;PMT = FV*(((1 + R)^N - 1)^-1* R);print" PMT =$",PMT

 

 PMT =$ 737.22

 Apr 1, 2020
 #7
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Suppose you are 35 years old and would like to retire at age 65.​ Furthermore, you would like to have a retirement fund from which you can draw an income of​ $50,000 per year–​forever! How much would you need to deposit each month to do​ this? Assume a constant APR of 6​% and that the compounding and payment periods are the same.

Guest Apr 1, 2020
 #8
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50000 / 0.06 =$833,333.33 - This is a "Perpetual Annuity"

 

FV=833333.33; R=0.06/12; N=12*30;PMT = FV*(((1 + R)^N - 1)^-1* R);print" PMT =$",PMT

 

 PMT =$ 829.59

Guest Apr 1, 2020
 #9
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Find the savings plan balance after 12 months with an APR of 2​% and monthly payments of​ $200.

Guest Apr 1, 2020
 #10
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P=200;   R=0.02/12;  N=12;    FV=P*((1 + R)^N - 1)/ R;print"FV = $",FV

 

FV = $ 2422.12

Guest Apr 1, 2020
 #11
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Find the savings plan balance after 3 years with an APR of 9​% and monthly payments of​ $150.

Guest Apr 1, 2020
 #12
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P=150;   R=0.09/12;  N=12*3;    FV=P*((1 + R)^N - 1)/ R;print"FV = $",FV

 

FV = $ 6172.91

Guest Apr 1, 2020
 #13
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An individual borrowed​ $73,000 at an APR of 3​%, which will be paid off with monthly payments of​ $356 for 24 years.

Guest Apr 1, 2020
 #14
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So, what do you want calculated?

Guest Apr 1, 2020
 #15
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What is the payment?

Guest Apr 1, 2020
 #16
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But you have the payment of $356 monthly payment. The exact amount is =$355.88

Guest Apr 1, 2020
 #17
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Consider a student loan of​ $25,000 at a fixed APR of 6​% for 20 years.

 

a. Calculate the monthly payment.

b. Determine the total amount paid over the term of the loan.

c. Of the total amount​ paid, what percentage is paid toward the principal and what percentage is paid for interest.

Guest Apr 1, 2020
 #18
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N=20*12; R=0.06/12;PV=25000; PMT=PV*R*((1 + R)^N) / ((1 + R)^(N) - 1);print"LOAN PMT =$",PMT
 

a - LOAN PMT =$ 179.11

 

b - $179.11  x  20 years  x  12 =$42,986.40 - Total principal + interest

 

c - $42,986.40 - $25,000 =$17,986.40 Total interest paid

17,986.40 / 42,986.40 =41.84% paid toward interest

25,000 / 42,986.40 =58.16% paid toward principal.

 

Note: I got to go now. It is my bed time !!.

Guest Apr 1, 2020
 #19
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Thank you for your help!!

Guest Apr 1, 2020

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