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A:
Q: How much must you save each year
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You would like to purchase a vacation home when you retire 9 years from now. The current cost of the homes that interest you is $245,306; however, you expect their price to rise at 2.69% per year for the next 9 years. How much must you save each year in nominal terms (the same amount each year) for 12 years, starting next year, to just be able to pay for the vacation home if you earn 4.56% APR (compounded annually) on your investments?
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- When you retire, you plan to draw $50,000 per year from your retirement accounts, which will be earning 6% per year. Find PV Annuity: If you wish to do that for 10 years starting one year after you retire, what does the balance in your retirement account have to be when you retire? Find PV Annuity: If the account will be earning 3% per year, and you wish to do that for 20 years starting on the day you retire, what does the balance in your retirement account have to be when you retire?Please answer the following problem with full working: You wish to purchase a home for $500,000. You will make payments of $30,000 at the end of every year for 30 years. The current rate of interest is 6.5% convertibly quarterly. Find the down payment that will be necessary.When you retire, you plan to draw $50,000 per year from your retirement accounts, which will be earning 3% per year. (Include dollars and cents in your answers.) If you wish to do that for 10 years starting one year after you retire, what does the balance in your retirement account have to be when you retire? If the account will be earning 6% per year, and you wish to do that for 10 years starting one year after you retire, what does the balance in your retirement account have to be when you retire? If the account will be earning 3% per year, and you wish to do that for 20 years starting on the day you retire, what does the balance in your retirement account have to be when you retire?
- 2) You decide to buy a house costing $6,000,000. You pay $1,000,000 down, and the remainder will be paid inmonthly installments over 25 years at 3.9% compounded monthly. a) What is the monthly payment?b) What is the outstanding balance after making the 100the payment?c) What is the equity after making the 100the payment?d) How much of the 100the payment will go to the principal and how much to interest?e) How much interest will be paid over the entire length of the loan? TVM SOLVERYou want to save for a down payment on a new home in the future. You can invest $225 at the end of each month, and you expect to earn 6% APR compounded monthly on your investment. How much will you be able to have saved in 5 years? Your Answer: AnswerYou want to purchase a house valued at $200,000. After a downpayment, you can finance the house with a 20 year mortgage at 4.2% APR, compounded monthly. What percentage of the house will you need to finance in order to have monthly payments of $1,000? Round to two decimal places. What is the downpayment?
- You have found your dream house. The selling price is 120,000. You will put $20,000 down and obtain a 25-year fixed-rate mortgage at 8.75% (APR compounded semiannually) for the rest. You plan to prepay the loan by making an additional payment each month along with your regular payment. How much extra must you pay each month if you wish to pay off the load in 20 years? (Assume there is no early payment penalty).If you took a home mortgage loan of $150,000 for 30 years at 8.4%, compounded monthly, your monthly payments would be $1142.76. Suppose after 2 years you had an additional $2000. Would you save more over the life of the loan by paying an extra $2000 (one-time) with your 24th payment or by paying $1160 per month beginning with the 25th payment? To help you answer this question, complete the following. (a) Find the unpaid balance after 24 payments (b) Determine how long it takes to pay off the loan with the regular $1142.76 payments and the additional $2000 payment. Then find the total interest paid. (c) Determine how long it takes to pay off the loan without the additional $2000 payment, but with monthly payments of $1160 from the 25th payment. Then find the total interest paid. (d) Which payment method costs less?You'd like to purchase a house. You're monthly take home pay is $4560. You'd like to use one fourth of your take home pay for a house payment. You have $18500 for a down payment. You can get an APR of 4.35% compounded monthly. What is the total cost of a house you can afford with a 15 year mortgage?
- You plan to purchase a $500,000 home with a 20% down payment. You can take out a 30-year FRM of $400,000 at an APR of 7.2%. (1) What is your monthly payment? (2) If you make regular monthly payments, how long will it take to pay off half of the loan? (i.e., reduce the principle of the loan balance to half) (3) After making regular monthly payments for 10 years, how much will be the loan balance? Assume you obtain two quotes with and without (discount) points: either 7.2% APR without point or 6% with 2.5 points.Someone offers to buy your car for four, equal annual payments, beginning 2 years from today. If you think that the present value of your car is $9,000 and the interest rate is 10%, what is the minimum annual payment that you would accept?For 40 years, you invest $200 per month at an APR of 4.8% compounded monthly, then you retire and plan to live on your retirement nest egg. a) How much is in your account on retirement? b) Suppose you set up your account as a perpetuity on retirement. What will your monthly income be? (Assume that the APR remains at 4.8% compounded monthly.) c) Suppose now you use the balance in your account for a life annuity instead of a perpetuity. If your life expectancy is 21 years, what will your monthly income be? (Again, assume that the APR remains at 4.8% compounded monthly.) d) Compare the total amount you invested with your total return from part c. Assume that you live 21 years after retirement.
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