75. (Spreadsheet helpful) Suppose that your parents are willing to lend you $20,000 for part of the cost of your college education and living expenses. They want you to repay them the $20,000, without any interest, in a lump sum 15 years after you graduate, when they plan to retire and move. Meanwhile, you will be busy repaying federally guaranteed loans for the first 10 years after graduation. But won't be able to repay the lump sum without saving up. So you decide that you will put aside money in an interest-bearing account every month for the five years before the payment is due. You feel comfortable with putting aside $275 a month (the amount of the at , to 50 come you you realize that ear о payment on your college loans, which will be paid off after 10 years). se is the ears How high an annual nominal interest rate on savings do you need to accumulate the $20,000 in 60 months, if interest is compounded monthly? Enter into a spreadsheet the values d 275, r = 0.05 (annual 60, and the savings formula with r ceе. rate), and n = replaced by r/12 (the monthly interest rate). You will find that the amournt accumulated is not enough. Change r to 0.09; it's more than enough. Try other values until you determine r to two decimal places. t neet, ities
75. (Spreadsheet helpful) Suppose that your parents are willing to lend you $20,000 for part of the cost of your college education and living expenses. They want you to repay them the $20,000, without any interest, in a lump sum 15 years after you graduate, when they plan to retire and move. Meanwhile, you will be busy repaying federally guaranteed loans for the first 10 years after graduation. But won't be able to repay the lump sum without saving up. So you decide that you will put aside money in an interest-bearing account every month for the five years before the payment is due. You feel comfortable with putting aside $275 a month (the amount of the at , to 50 come you you realize that ear о payment on your college loans, which will be paid off after 10 years). se is the ears How high an annual nominal interest rate on savings do you need to accumulate the $20,000 in 60 months, if interest is compounded monthly? Enter into a spreadsheet the values d 275, r = 0.05 (annual 60, and the savings formula with r ceе. rate), and n = replaced by r/12 (the monthly interest rate). You will find that the amournt accumulated is not enough. Change r to 0.09; it's more than enough. Try other values until you determine r to two decimal places. t neet, ities
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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Question
How do I calculate the interest in excel?
Transcribed Image Text:75. (Spreadsheet helpful) Suppose that your parents
are willing to lend you $20,000 for part of the cost of
your college education and living expenses. They want
you to repay them the $20,000, without any interest,
in a lump sum 15 years after you graduate, when
they plan to retire and move. Meanwhile, you will be
busy repaying federally guaranteed loans for the first
10 years after graduation. But
won't be able to repay the lump sum without saving
up. So you decide that you will put aside money in
an interest-bearing account every month for the five
years before the payment is due. You feel comfortable
with putting aside $275 a month (the amount of the
at
, to
50
come
you
you realize that
ear
о
payment on your college loans, which will be paid off
after 10 years).
se
is the
ears
How high an annual nominal interest rate on
savings do you need to accumulate the $20,000 in
60 months, if interest is compounded monthly? Enter
into a spreadsheet the values d 275, r = 0.05 (annual
60, and the savings formula with r
ceе.
rate), and n =
replaced by r/12 (the monthly interest rate). You will find
that the amournt accumulated is not enough. Change r
to 0.09; it's more than enough. Try other values until you
determine r to two decimal places.
t
neet,
ities
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