Part III: You have decided that you would like to buy a townhouse in 8years and will need a down payment of $30,000. How much do you need to save each year if your savings account returns an interest rate of 3.50%. N (period of time) (Interest) PV (Present Value FV (Future Value) 5 PMT (Annuity) determine annuity payment which is a monthly savings of only? After BSU I can do this!
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- Calculating interest earned and future value of savings account. If you put 6,000 in a savings account that pays interest at the rate of 3 percent, compounded annually, how much will you have in five years? (Hint: Use the future value formula.) How much interest will you earn during the five years? If you put 6,000 each year into a savings account that pays interest at the rate of 4 percent a year, how much would you have after five years?Use the tables in Appendix B to answer the following questions. A. If you would like to accumulate $4,200 over the next 6 years when the interest rate is 8%, how much do you need to deposit in the account? B. If you place $8,700 in a savings account, how much will you have at the end of 12 years with an interest rate of 8%? C. You invest $2,000 per year, at the end of the year, for 20 years at 10% interest. How much will you have at the end of 20 years? D. You win the lottery and can either receive $500,000 as a lump sum or $60,000 per year for 20 years. Assuming you can earn 3% interest, which do you recommend and why?You want to invest $8,000 at an annual Interest rate of 8% that compounds annually for 12 years. Which table will help you determine the value of your account at the end of 12 years? A. future value of one dollar ($1) B. present value of one dollar ($1) C. future value of an ordinary annuity D. present value of an ordinary annuity
- If you deposit $3,500 monthly into a savings account which earns 4.25% interest rate compounded annually, how much will you have after 10 years of saving?a. $598500b. S510141 c. S636810 d. S522225 e. S42512A new investment opportunity for you is an annuity that pays $1,100 at the beginning of each year for 3 years. You could earn 5.5% on your money in other investments with equal risk. What is the most you should pay for the annuity? Select the correct answer. a. $3,141.25 b. $3,130.95 c. $3,120.65 d. $3,110.35 e. $3,100.051.What is the amount a person would have to deposit today (present value) at 11 percent interest rate to have $8500 saved 9 years from now. 2.What is the amount you would have to deposit today to be able to take out $2070 a year for 2 years from an account earning 14 percent. 3.If you desire to have $38300 for a down payment for a house in 11 years, what amount would you need to deposit today? Assume that your money will earn 4 percent.
- Topic: Time Value of Money and Annuity 1. If you deposit $10 in an account that pays an interest of 5%, compounded annually, how much will you have at the end of 10 years? 50 years? 100 years? 2. Complete the following table solving for the present value PV: Case FV Interest rate 5% No. of periods PV $10,000 $563,000 $5000 A. 5 7835 4% 20 5.5% 3 3. Suppose you want to have $ 0.5 million saved by the time you reach age 30 and suppose that you are 20 years old now. If you can eam 5% on your funds, how much would you have to invest today to reach your goal? 5 million 4. How much would you have to deposit in an account today that pays 12% interest, compounded quarterly, so that I have a balance of $20,000 in the account at the end of 10 years? = 6131 5. Calculate the present value of an annuity-immediate of amount $200 paid annually for 10 years at the rate of interest of 12% per annum. Also calculate its future value at the end of 10 years. PV= 1130QUESTION 1 Considering the following scenario. In years 0, 2, 4, 6, and 8, you deposit $750 in your savings account. The saving account earns 4.25% compounded anbually. What is the future value in year 10? 4,847.22 5,411.56 3,579.94 6,411.56Jenny puts $200 into a savings account today, the account pays an annual interest rate of 5%, but compounded semiannually, and you withdraw $100 after 6 months. What would your ending balance be 20 years after the initial $100 deposit was made? m Nper (or N) =n*m Rate (or I/Y)=i/m PV PMT FV Identify variables and use excel
- Intro You decided to save $1,400 every year, starting one year from now, in a savings account that pays an annual interest rate of 5%. Part 1 74440 How many years will it take until you have $100,000 in the account? 1+ decimals Submitsuppose you are planning to buy a home in 8 years from now that costs you 47114 OMR, How much should you save each year in your bank account that pays 6.012 percent to reach your goal?2. Calculate how much you would have in a savings account 5 years from now if you invest $1,000 today, given that the interest paid is 8% compounded: a. Annually b. Semiannually c. Quarterly d. Continuously 3. What is the present value of a perpetuity of $80 per year if the discount rate is 11% I 4. If you need $6,000 5 years from now, how much of a deposit must you make in your savings account each year, assuming an 8% annual interest rate? 5. You have applied for a home mortgage of $75,000 to finance the purchase of a new home for 30 years. The bank requires a 14% interest rate. What will be the annual payment? 6. Set up an amortization schedule for a $5,000 loan to be repaid in equal installments at the end of each of the next 3 years. The interest rate is 15% 7. Suppose that a company borrows $20,000 for 1 year at a stated rate of interest of 9%. What is the annual percentage rate (APR) if interest is paid to the lender a. Annually b. Semiannually c. Quarterly