1. You are 25, recently graduated, and have a job paying 98u a) You want to take a trip to Rome next summer and want to save $4000 between now (January 1) and June 1 of next year (18 months). You have an account that will earn 6% annually. How much will you need to save every month to get to the desired amount? b) You think it might be a good time to buy a condo instead of renting. You want to borrow $140,000 at 3.7% for 30 years. What will your monthly payments be? c) You plan to take off two years of work starting in five years to complete your master's degree. If you want to have $37000 in an account that you can live off, how much do you have to put aside monthly now in an account paying 5% per year?
1. You are 25, recently graduated, and have a job paying 98u a) You want to take a trip to Rome next summer and want to save $4000 between now (January 1) and June 1 of next year (18 months). You have an account that will earn 6% annually. How much will you need to save every month to get to the desired amount? b) You think it might be a good time to buy a condo instead of renting. You want to borrow $140,000 at 3.7% for 30 years. What will your monthly payments be? c) You plan to take off two years of work starting in five years to complete your master's degree. If you want to have $37000 in an account that you can live off, how much do you have to put aside monthly now in an account paying 5% per year?
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Transcribed Image Text:1. You are 25, recently graduated, and have a job paying you $40000 a year.
a) You want to take a trip to Rome next summer and want to save $4000 between
now (January 1) and June 1 of next year (18 months). You have an account that
will earn 6% annually. How much will you need to save every month to get to the
desired amount?
b) You think it might be a good time to buy a condo instead of renting. You want to
borrow $140,000 at 3.7% for 30 years. What will your monthly payments be?
c) You plan to take off two years of work starting in five years to complete your
master's degree. If you want to have $37000 in an account that you can live off,
how much do you have to put aside monthly now in an account paying 5% per
year?
d) You want to retire in 45 years with $1 million in the bank. You think you can get
an average of 5.2% annually in an investment account. How much will you have
to save every year to get to $1 million?
e) If your million dollar account continues to earn 5.2% a year, how much could you
take out every year to live on for the following 25 years?
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