Josh is planning to withdraw $9000 from a savings account at the end of each quarter for 3 years. If the payments are deferred for 6 years and interest is 5.75% compounded semi-annually, what amount must be invested now into the savings account? Rose has saved $90 000. If she decides to withdraw $4000 at the beginning of each month and interest is 6.25% compounded annually, for how long can she make withdrawals?

Q: At retirement, Maria's saving account has $620,000 in it and is earning 1.2% compounded monthly.…

A: The present value is the value of the sum received at time 0 or the current period. It is the value…

Q: Mark deposits $50,000 now into an account which will eam interest at a rate of 7% per year, how much…

A: Present value = $50,000 Interest rate = 7% Number of years = 4

Q: Kym plans to deposit $130 in an account at the end of each month for the next three (3) years so she…

A: Future value Future value simply means determining the value of future investments. This approach…

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: Nick saves $175 per month, deposited directly into his credit union account on payday, the last day…

A: In order to calculate the amount at the end of a specific period of time, the future value of the…

Q: On a child's first birthday, a parent wishes to deposit enough money so that the child can withdraw…

A: Present Value of annuity = Annual payments * PVAF(rate, number of years) Present Value = Future…

Q: ane needs $30,000  to buy a new car in four years. How much should she deposit at the endof each…

A: We will use the concept of time value of money here. The concept of time value of money states that…

Q: Dottie wants to buy a 150,000 house and puts a down payment of 60,000. He makes monthly payments for…

A: Given:

Q: Susan plans to make an investment today which promises to return to her $3,000 each year for ten…

A: Using excel PV function

Q: Bob and Pat want to purchase a vacation home in ten years and need $45,000 for a down payment. How…

A: Time value tells that money received today has more value than that of receiving exact value later…

Q: Patrick makes payments of $250 per month at the end of each month. At the end of 10 years, he wants…

A: The rate of interest required to have the desired amount can be calculated with the help of rate…

Q: How much should Bianca have in a savings account that is earning 2.50% compounded monthly, if she…

A: Solution:- When an equal amount is withdrawan each period at end of the period, it is called…

Q: Truman is saving up for a $7,000 trip to Fiji. If his bank account earns 5.8% compounded monthly and…

A: Final amount required = $7000 Interest rate = 5.8% per annum  Semiannual deposit (A) = $450 Let n =…

Q: How much should Manvir have in a savings account that is earning 3.50% compounded semi-annually, if…

A: Present value of an investment is the sum total value of all deposits in today's period that are…

Q: Charlie wants to withdraw $12,000 each year forever from his account. At an interest rate of 6% per…

A: Perpetuity is the stream of cash flows or payments that are made at equal intervals that do not have…

Q: Sharon has  an account that starts at $5,800. She  add $100 to it each month. It earns 7.4%…

A: Present value is the estimation of the current value of future cash value which is likely to be…

Q: How much should Brianna have in a savings account that is earning 2.50% compounded semi-annually, if…

A: We need to use present value of ordinary annuity formula to calculate amount in account today to…

Q: Steven plans to contribute $300 to his "super unrealistically high" savings account at the end of…

A: Here,

Q: Sabrina plans to save for next two years. She plans to put away $1000 every 6 months starting 6…

A: The value of the amount saved is the future value of the savings which is the savings amount plus…

Q: Tabatha has saved $85, 700.00. If she decides to withdraw $2,726.00 at the beginning of every month…

A: The present value of an annuity is the current worth of a series of cash flows at a certain rate of…

Q: Sam's family has decided that they will start depositing $100 at the end of every month into a…

A: Monthly Deposit = 100 End of month deposits Time Period =  3 years or 36 months Interest Rate = 4.6%…

Q: John and Rosamond want to retire in 10 years and can save $170 every three months. They plan to…

A: The Future Value of an Ordinary Annuity refers to the concept which gives out the compounded or…

Q: Tak wants to save $10 000 for a vacation. He deposits $150 at the end of each month for 4.5 years in…

A: Solved using Financial Calculator  PMT = +/- 150 N = 4.5 years *12 months = 54 I/Y = 8.7/12 = 0.725…

Q: Aryssa has saved $84,100.00. If she decides to withdraw $3,337.00 at the beginning of every month…

A: Present Value = PV = $84,100 PMT = $3,337 Rate = 8.01%

Q: Aryssa has saved $72,100.00. If she decides to withdraw $2,650.00 at the beginning of every month…

A: The present value of an annuity represents the current value of the cash flow series at a particular…

Q: Tristan will deposit $254 into an account every two weeks (26 times per year). The account earns an…

A: Future value refers to the value of a current asset at some future date using inflation or…

Q: John and Rosamond want to retire in 10 years and can save $140 every three months. They plan to…

A: Future value refers to the total value of an investment or savings at a specified future date,…

Q: Rose has saved $90 000. If she decides to withdraw $4000 at the beginning of each month and interest…

A: Present value is the value of the amount in current time that is expected to be received in future…

Q: Sarafina is making monthly payments into an annuity. She wants to have $900 in the fund to buy a new…

A: Future value of annuity With periodic interest rate (r), period (n) and annuity (PMT), the future…

Q: Louise plans to save $3,000 a year every year for 10 years, beginning next year, and then stop. Thi…

A: Future value refers to the value of a current asset at some future date affected by interest rates,…

Q: Brayden and Noah plan to purchase a home for $140,000. They will pay 20% down and finance the…

A: An annuity is a series of cash flows that involve an equivalent amount occurring at equal time…

Q: Alyssa has $800,000 saved for retirement in an account earning 2.2% interest, compounded quarterly.…

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

Q: Metehan Atay invests 550 pounds per week in the bank for an investment that will earn him 20% per…

A: An annuity is a sequence of periodic cash flows with a fixed amount at equal time intervals over a…

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.