Assuming an interest rate of 6.88% compute how much income you will have each month if you save $500 each month for the next 37 years and then use the accumulated money to buy an annuity of equal monthly payments for u+2 years? U=12

Q: What per period interest rate should you use in the annuity formula to do this calculation? In other…

A: The effective annual interest rate is a crucial concept in finance that is used to describe the true…

Q: Using an annual effective interest rate of 7%, find X

A: To find the value of X, we need to calculate the present value of the cash flows using the given…

Q: You want to start to save for a major purchase. You can invest P320 every three months for 3 years…

A: The amount of interest earned can be computed with the help of future value of annuity function

Q: of loan can you get if you pay $700 each month at a yearly rate of 0.89% for 10 yea

A: The given problem can be solved using PV function in excel. PV function computes loan amount for…

Q: If you want to have $5600 at the end of 9 years, how much money you need to deposit today into an…

A: If you want to have $5600 at the end of 9 years, the money you need to deposit today into an account…

Q: Assume that you make monthly payments of $625 into an ordinary annuity paying 4% compounded monthly.…

A: In this question we need to compute the ordinary annuity from following details: Monthly payment =…

Q: $27,831.47 $29,851.84 E S29,083.89 $30,729.84

A: The concept of the time value of money states that the current worth of money is more than its value…

Q: If you have an annuity with a 5.5% compounded interest rate monthly and 2,000 is invested at the end…

A: The future value of annuity refers to the total value of a series of equal cash flows received or…

Q: What is the present value of an annuity that pays $58 per year for 13 years and an additional $1,000…

A: We can make use of the financial calculator to obtain the present value, PV. Inputs: I/Y = rate =…

Q: 1- If you invested $10,000 in an investment account and you expect it to double in 4 years, what…

A: 1. Investment= $10000 time= 4 years

Q: ou borrow X for 10 years at an annual effective interest rate of i = 6%. If you pay the loan amount…

A:

Q: A lender is promised a $100 payment (including interest) one year from today. If the lender has an…

A: A lender is promised $ 100 payment including interest one year from today. Simply stating, A lender…

Q: how much would you have to deposite if you wanted to have $49000 in five years?annual interest rate…

A: The formula to calculate present value is as below:

Q: If you have $30,000 in a savings account earning 10 percent, how large an annuity can you draw out…

A: Present value = $30000 Interest rate = 10% Period = 8 Years

Q: Sally Mander wants to set up a perpetual annuity for herself that will pay $60,000 annually that…

A: A perpetual annuity is a financial instrument which gives regular fixed payments to the holder for…

Q: the discount rate is 7.6%, what would you be willing to pay for receiving a payment of $700 eve

A: Value of any annuity is the present value of cash flow from the annuity based on time and interest…

Q: Your insurance agent is trying to sell you an annuity that costs $80,000 today. By buying this…

A: Present value is an estimate of the present value of future cash values ​​that may be received at a…

Q: . Example 2 You would like to have $500,000 in your retirement account when you retire in 25 Your…

A: The future value of money is considered as the sum of money received after a period of time at a…

Q: Sally Mander wants to set up a perpetual annuity for herself that will pay $85,000 annually that…

A: Perpetual Annuity : When an Investor invests an amount which will keep compounding itself at a…

Q: You wish to accumulate $100,000 through monthly payments of $100. If you can earn interest at an…

A: To calculate the time period for a required future value with given periodic deposits at a given…

Q: How much money would you need to place in an account to have $1,000 10 years from today? Assume the…

A: The formula used as follows: Present value=Future value1+innt

Q: If you have $6000 in your savings account with 0.8% APR compounded monthly, how much will you have…

A: Formula

Q: You want to have $67,000 in your savings account 10 years from now, and you're prepared to make…

A: Payment per period is the regular payments made or received of an investment, while future value is…

Q: If you have $1,051.75 going into a long term savings account monthly, for 4 years, that pays and APR…

A: Here we can apply the principles, concepts and formula of time value of money to solve the question.…

Q: What is the most you would be willing to pay for an annuity that provides you with $13,700 at the…

A: Here,Annuity Received  (PMT) is $13,700Interest Rate (r) is 5.5%Time Period (n) is 3 years

Effective Interest Rate

The term interest rate can be defined as the amount that is charged by the lender as a percentage on the principal amount. Interest rate which is charged annually is known as annual percentage rate.