Jo wants to accumulate $40,000 to use for an around the world trip. She plans to accumulate the desired amount by depositing $5,500 annual-year-end payments into an account at the National Bank which pays 4% interest, compounded annually. 1. Compute the account balance at the end of the sixth year. 2. Compute the amount of each payment that Linda must make at the end of each of the six years to accumulate the $40,000

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A: Future Value is the value which is measured at a specified date at a given interest rate,  it can be…

Q: Gabriela wants to withdraw $5,000 from her account at the end of 5 years, and $7,000 at the end of 6…

A: Since Gabriela wants to withdraw a specific amount after a certain period of time, thus, it is…

Q: Today, Tiffany is starting to save up for a downpayment on a house. Currently she has $635 in an…

A: Down payment refers to the initial sum that is extended towards the purchase of something for which…

Q: Giselle wants to withdraw $7500 at the beginning of every three months for 20 years starting day of…

A: The given problem relates to retirement planning in which using the time value of money, we can…

Q: Lauren plans to deposit $5000 into a bank account at the beginning of next month and $200/month into…

A: Future value is the amount accumulated on the deposit made along with interest earned on the…

Q: how much will Lauren have in her account at the end of 6 years? (Assume she makes no withdrawals…

A: The future value (FV) is a financial concept that represents the worth or value of a sum of money at…

Q: One month from​ now, Kelly will make her first monthly contribution of ​$250 to a​ Tax-Free…

A: Future value = $55,000Interest rate = 7% compounded annuallyMonthly contributions = $250

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A: Time value of money (TVM) refers to the method used to measure the amount of money at different…

Q: Shayla deposited $4,000 into an account earning 5% interest per year, compounded every 6 months.…

A: A study that proves that the 1value of money today is higher than the future value of money is term…

Q: Sam has $6,596.43 in her bank account. Sam wants to know how much per month she must contribute to…

A: We need to rearrange formula below and solve for PMT (periodic payment). In the formula below:FV =…

Q: Claudia intends to accumulate $35,000, so 6 months earlier she opens an account with $7,500, earning…

A: Simple interest = Principal * interest * time Amount = Principal + simple interest Amount =…

Q: Helen contributed $500 at the end of every month for the past 5 years into an RRSP account, earning…

A: Annuity means series of no. of finite payments which are same in size and made in equal intervals.…

Q: Ms. Montanye plans to make 20 quarterly deposits of $200 into a savings account. The first deposit…

A: Lets understand the basics. For calculating accumulated saving at the end of any period then we need…

Q: Gwen decides to make regular deposits every month into an account that earns 8% annual interest,…

A: The question is based on concept of present value and future value of money .  formula as: FV=pmt…

Q: Jenna owns a jewelry business, and she plans to save $500 every month for 3 years to buy precious…

A: Using Excel

Q: What is the amount of each payment?

A: Given in the question: Borrow amount = $50,000 Interest Rate = 12% Time = 4 Years Loan has to be…

Q: Maria wishes to accumulate $8,000 by the end of 5 years by making equal, annual, end-of-year…

A: Here we will use the concept of time value of money. As per the concept of time value of money the…

Q: Callie won a grand prize of $40,000. She has decided to invest it today in an account from the…

A: The Present Value of Ordinary Annuity refers to the concept which gives out the discounted or…

Q: Keith is saving in a bank in order to purchase a new house in six years. She anticipates that the…

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Q: Laura opens a money market account that earns 3.0% per year by depositing $15,000. She then deposits…

A: Compounding is a technique through which future value (FV) of present amount is computed by using an…

Q: Harold starts saving in order to fund his children's education. He decides to deposit $120 each…

A: The value of an asset at a future date is called future value.

Q: et's parents decided to pay a lump sum payment today of $135000 so she will be able to make 4 years…

A: The future value is the future worth of the amount that will be paid or received in the future.

Q: Stacey and her husband David have a joint savings account that earns 3.47% interest payable…

A: Present value refers to the discounted value of all future cash flows discounted at a specific rate…

Q: Megan invests $1, 500 at the end of each year into an account earning 2% effective annual interest.…

A: Part 1:  Future value of the annuity in the first accountYear Amount Deposited0 $1,5001 $1,5002…

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A: A mortgage refers to a covered loan that is borrowed to purchase a property and the collateral for…

Q: Determine when the balance will be below $75,000. Determine when the balance will be paid off.…

A: Formulae Po=p(1−(1+r/12)^-m)/(r/12) P0 = Remaining loan p = Monthly payment r = Interest rate m =…

Q: Tika has $10 000 that he can deposit into a savings account for 5 years. ANZ pays compounds interest…

A: Time value of money- It is based on the concept that money earned today is worth more than similar…

Q: Cheska is saving for her dream cellphone. She deposits 2,000 pesos at the end of each month that…

A: Future Value refers to value of any current amount or flow of recurring payments at some future date…

Q: Jane deposits 10,000 USD and opens a deposit account at a bank. It will also deposit 6,000 USD one…

A: in this we have to use future value formula to calculate interest rate.

Q: Yolanda deposited $1,800 at the end of each six months for 2 years in a savings account. If the…

A: The future value of an investment is the amount accumulated in the account after a period of time.…

Cost of Credit

The cost of credit is an extra amount that the borrower has to pay besides the loan amount. These credit charges may vary from loan to loan. The cost of credit includes interest charges, maintenance charges, and arrangement charges. Some of the costs are mandatorily collected by the lender based on the loan amount and tenure of the loan. The cost of credit is also called finance charges of the credit.