Jamal plans to retire in 17 years. He is saving $2000 every start of the month in a retirement savings account paying him a long-term interest of 9% compounded quarterly until retirement. The rate changes following the retirement. He wants $7000 per month paid to him at the start of the month for 20 years after the retirement. At what rate should his savings account pay him to fulfill his dream? (Use the Rate function in Excel) Select one: O A. 10.27% В. 10% О С. 9% O D. 6.22% E. 6.34%

Jamal plans to retire in 17 years. He is saving $2000 every start of the month in a retirement savings account paying him a long-term interest of 9% compounded quarterly until retirement. The rate changes following the retirement. He wants $7000 per month paid to him at the start of the month for 20 years after the retirement. At what rate should his savings account pay him to fulfill his dream? (Use the Rate function in Excel) Select one: O A. 10.27% В. 10% О С. 9% O D. 6.22% E. 6.34%

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter5: The Time Value Of Money

Section: Chapter Questions

Problem 44P

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Concept explainers

Amortized Loans

The term "amortization" refers to spreading the value of a loan or a debt over a series of regular payments or installments comprising of both the principal and interest amount. It generally involves the process where in the value of a loan or an intangible asset is written down over its maturity period.

Question

Jamal plans to retire in 17 years. He is saving $2000
every start of the month in a retirement savings
account paying him a long-term interest of 9%
compounded quarterly until retirement. The rate
changes following the retirement. He wants $7000 per
month paid to him at the start of the month for 20
years after the retirement. At what rate should his
savings account pay him to fulfill his dream? (Use the
Rate function in Excel)
Select one:
O A. 10.27%
O B. 10%
O C. 9%
O D. 6.22%
E. 6.34%

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