Tutors Answer Your Questions about Finance (FREE)
Question 570702: Could someone please help me with this problem. There was an example in the book, but I didn't understand it. "An educational loan of $8400 for 10 years is to be repaid in monthly installments of $122.50. What is the annual rate of this loan, computed as simple interest?"
Click here to see answer by scott8148(5879)  |
Question 570702: Could someone please help me with this problem. There was an example in the book, but I didn't understand it. "An educational loan of $8400 for 10 years is to be repaid in monthly installments of $122.50. What is the annual rate of this loan, computed as simple interest?"
Click here to see answer by josmiceli(6769)  |
Question 424976: 1. Mike’s Sport Shop deposits $3,600 at the end of each year for 12 years at 7% annual interest.
a. How much will this ordinary annuity be worth at the end of the 12 years? (5 points)
Answer:
b. How much more will this annuity be worth (annuity due) if Mike deposits the money at the beginning of each year instead of at the end of each year? (5 points)
Answer:
2. Barb and John Reed want to know how much they must deposit in a retirement savings account today to have payments of $1,750 every six months for 15 years. The retirement account is paying 8% annual interest, compounded semiannually. (5 points)
Answer:
3. Lena Dimock is saving for her college expenses. She sets aside $200 at the beginning of each three months in an account paying 8% annual interest, compounded quarterly. How much will Lena have accumulated in the account at the end of four years? (5 points)
Answer:
Part II. Case Study
Julie has just completed the rigorous process of becoming a Certified Financial Planner (CFP). She is looking forward to working with individuals on saving for retirement. She would like to show her clients the value of an annuity program as one of the best options for investing current earnings in a tax-deferred account.
1. If a client puts the equivalent of $55 per month, or $660 per year, into an ordinary annuity, how much money would accumulate in 20 years at 3% compounded annually? (5 points)
Answer:
2. Jackie, a 25 year old client, want to retire by age 65 with $2,000,000. How much would she have to invest annually, assuming a 6% rate of return? (5 points)
Answer:
3. Another client, Wynona, decides that she will invest $5,000 per year in a 6% annuity for the first ten years, then $6,000 for the next ten years, and then $4,000 per year for the last ten years, how much will she accumulate? [Hint: Treat each ten-year period as as separate annuity and compute the Future Value. After the ten years, assume that the value will continue to grow at compound interest for the remaining years of the 30 years. Use tables from Unit 6 to compute compound interest.
Click here to see answer by Hyot(1) |
Question 567610: Assume your planning to invest $5000 each year for 6 years earning 10% per year. What is the future value in the first $5000 invested?
Please help solve future value in the first $5000 invested.
Here is what I've thus far:
Future Value = present value X [(1 + interest rate) x (number of years)]
FV= $5000 x (1 + .010 x 6)
FV = $5000 x 1.010 x 6)
FV = $5000 x 6.06
FV = $30,300
30,300 - 30,000 = 300.00 / 6 = $50.00
First year $5000 investment is worth 5,050.00
Click here to see answer by bucky(2097) |
Question 564055: You have $10,000 which you will invest for the next four years. You are considering the following investment alternatives:
(I) Purchase units in a bond mutual fund which pays $210 interest quarterly. Assume that the
interest is reinvested at the coupon rate.
(II) Purchase a 4-year guaranteed investment certificate which pays 3 percent compounded
monthly.
(III)Invest in a stock which promises the following cash flows:
Year 1 $ 0
Year 2 500
Year 3 750
Year 4 2,000
(a)Assume that at the end of year 4, you will get back your $10,000. Which investment alternative do you prefer? Why?
(b)What factors, other than the rate of return, should you consider in making your investment decision?
Click here to see answer by cp24(1) |
Question 567012: William opened two investment accounts for his grandson’s college fund. The first year, these investments, which totaled $18,000, yielded $831 in simple interest. Part of the money was invested at 5.5% and the rest at 4%. How much was invested at each rate?
Click here to see answer by mananth(10539)  |
Question 565566: This really confuses me since it showed be put in the formula I=prt. If this was explained that would help! Thanks.
Madison invested $50,000 for two years. A part of this investment had 10% annual interest and the rest was invested at 15% annual interest. The interest from the investment at 10% was $350 more than the interest from the investment at 15%. How much did she invest at 10%? How much did she invest at 15%?
Click here to see answer by lwsshak3(2907) |
Question 563742: a person borrows $10000 and agrees to repay the loan in equal instalments over 20 years. interest is 12% per annum on any money owing
A) what is the amount of each repayment, if the repayment are made
i) annually, ii) quarterly, iii) monthly, iv) weekly
B) which is the cheapest of the four methods of repayment in (A)
Click here to see answer by Theo(2967)  |
Question 560716: Please help solve this problem. A couple plans to save for their childs' college education. What principal must be deposited when their child is born in order to have $100,000 when the child turns 18? Assume the money earns 4% interst compounded quarterly.
Click here to see answer by stanbon(48502) |
Question 559161: What is the model for unkowns for this problem: Mrs. B invested $30,000: part at 5%, and part at 8%. The total interest on the investment was $2100. How much did she invest at each rate?
I started here: $30,000-x=7
x=.05
y=.08
Stuck now...
Click here to see answer by scott8148(5879)  |
Question 559038: The park had initially planned to charge $8 for admission and expected to have 2400 visitors a day. Allison and Hannah were assigned the task of analyzing the parks admission revenues.
a) How much revenue would the park have for one day at the current price?
b) Market research shows for every $0.50 the admission price is raised, the park will have 80 fewer visitors. How much would you expect the park revenue to be if the park raised their admission price by $1?
After a few calculations, Allison and Hannah realize the park will make more money if they raise the price of admission. However, they also understand that there must be a limit to how much the park can charge.
As a result, they model the situation with the equation, R = (2400 - 80x)(8 + 0.5x), where R represents the revenue from sales and x represents the number of price increases.
Use this Factored form Quadratic equation to solve for the zeroes, and then use the zeroes to calculate the number of price increases that will generate the maximum Revenue.
Now demonstrate a second strategy for solving such a problem. This process will ultimately double check your results from above...
a) Express this same Quadratic R = (2400 - 80x)(8 + 0.5x), in Standard form: R = ax2 + bx + c.
b) Complete the Square to again determine the number of price increases that will generate the maximum Revenue.
c) What is the Maximum Revenue that can be generated? (from just looking at your results!)
I would be
GRateful for any help you give me
Click here to see answer by stanbon(48502) |
Question 553978: A university bookstore recently sold a wirebound graph-paper notebook for $1.64, and a college-ruled notebook for $1.17. At the start of spring semester, a combination of 50 of these notebooks were sold for a total of $66.02. How many of each type were sold?
Click here to see answer by lwsshak3(2907) |
Question 548387: A tour group split into two groups when waiting in line for food at a fast food counter. The first group bought 8 slices of pizza and 7 soft drinks for $34.29. The second group bought 5 slices of pizza and 7 soft drinks for $24.87. How much does one slice of pizza cost?
Click here to see answer by mananth(10539)  |
Question 545751: A total of $12,000 is invested in two funds paying 3% and 3.4% simple interest. The annual interest is $378. How much is invested in each fund?
Can you show the steps as well so I can figure out how to do it myself? Thank you!
Click here to see answer by mananth(10539)  |
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