Theadre Adams wants to open an accounting firm once she gets out of college in 4 years. She has determined that in order to open up her business she would need $160,000.00. She has determined that she would need a $30,000 down payment. The $160,000 would go towards paying out on a monthly basis a total of 4 years. What would her annuity payment be monthly in order to raise the money if she saves at an institution that offers 5.5% interest on deposit? If the same financial institution would then offer 8% on deposit over 48 months, what is the monthly payout of the annuity that she will use for her business’ monthly expenses?
Theadre Adams wants to open an accounting firm once she gets out of college in 4 years. She has determined that in order to open up her business she would need $160,000.00. She has determined that she would need a $30,000 down payment. The $160,000 would go towards paying out on a monthly basis a total of 4 years. What would her annuity payment be monthly in order to raise the money if she saves at an institution that offers 5.5% interest on deposit? If the same financial institution would then offer 8% on deposit over 48 months, what is the monthly payout of the annuity that she will use for her business’ monthly expenses?
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Theadre Adams wants to open an accounting firm once she gets out of college in 4 years. She has determined that in order to open up her business she would need $160,000.00. She has determined that she would need a $30,000 down payment. The $160,000 would go towards paying out on a monthly basis a total of 4 years.
- What would her
annuity payment be monthly in order to raise the money if she saves at an institution that offers 5.5% interest on deposit? - If the same financial institution would then offer 8% on deposit over 48 months, what is the monthly payout of the annuity that she will use for her business’ monthly expenses?
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