The following problem is about the time value of money and interest rates. (4) a) Steve wishes to have $100 000 to retire when he turns 65. He plans to deposit $30 000 at a rate of i = 4.6%. At what age must steve make this deposit to reach his goal? (2) b) Steve borrowed $13000 from the bank 24 months ago at a rate of i = 2%. Steven repaid $3500 today to the bank and will repay the rest of the loan in 6 months. How much will Steve need for the final payment in 6 months? c) In an emergency Steve borrowed $100 from a friend for the weekend. He repaid them the $100 plus an extra $2.50 of interest to say thanks at the end of the weekend. What is the effective annual rate charged on the loan from the friend?
The following problem is about the time value of money and interest rates. (4) a) Steve wishes to have $100 000 to retire when he turns 65. He plans to deposit $30 000 at a rate of i = 4.6%. At what age must steve make this deposit to reach his goal? (2) b) Steve borrowed $13000 from the bank 24 months ago at a rate of i = 2%. Steven repaid $3500 today to the bank and will repay the rest of the loan in 6 months. How much will Steve need for the final payment in 6 months? c) In an emergency Steve borrowed $100 from a friend for the weekend. He repaid them the $100 plus an extra $2.50 of interest to say thanks at the end of the weekend. What is the effective annual rate charged on the loan from the friend?
Algebra and Trigonometry (6th Edition)
6th Edition
ISBN:9780134463216
Author:Robert F. Blitzer
Publisher:Robert F. Blitzer
ChapterP: Prerequisites: Fundamental Concepts Of Algebra
Section: Chapter Questions
Problem 1MCCP: In Exercises 1-25, simplify the given expression or perform the indicated operation (and simplify,...
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Transcribed Image Text:The following problem is about the time value of money and interest rates.
a) Steve wishes to have $100 000 to retire when he turns 65. He plans to deposit $30 000 at a rate of i
= 4.6%. At what age must steve make this deposit to reach his goal?
(2)
b) Steve borrowed $13000 from the bank 24 months ago at a rate of i = 2%. Steven repaid $3500 today to the bank and will repay the rest of the loan in 6 months. How
much will Steve need for the final payment in 6 months?
c) In an emergency Steve borrowed $100 from a friend for the weekend. He repaid them the $100 plus an extra $2.50 of interest to say thanks at the end of the weekend.
What is the effective annual rate charged on the loan from the friend?
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