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?

Johnthemayor Apr 1, 2020

edited by
Guest
Apr 1, 2020

#1**0 **

FV=80000; R=0.04/12; N=12*12;PMT = FV*(((1 + R)^N - 1)^-1* R);print" PMT =$",PMT

PMT =$ 433.76

Guest Apr 1, 2020

#3**0 **

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?

Guest Apr 1, 2020

#6**0 **

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

PMT =$ 737.22

Guest Apr 1, 2020

#7**0 **

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**0 **

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**0 **

Find the savings plan balance after 12 months with an APR of 2% and monthly payments of $200.

Guest Apr 1, 2020

#11**0 **

Find the savings plan balance after 3 years with an APR of 9% and monthly payments of $150.

Guest Apr 1, 2020

#12**0 **

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**0 **

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

#17**0 **

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**0 **

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