Future Value of Savings Assignment | Homework For You
2. You need to have $40,000 in 6 years to use as a down payment on a house. The money will earn about 8% annually. How much do you need to invest today?
3. If you can pay $30000 every year for the next 10 years, how much mortgage loan can you afford if the annual interest rate is 6%.
4. Assume the total cost of a college education will be $50,000 when your child enters college in 12 years. You have $5,000 to invest today. What rate of interest must you earn on your investment to cover the cost of your child’s education?
5.You have a $1000 credit card bill to pay in the next 12 months, what is your monthly payment given a 2% monthly interest rate?
6.If you need $200,000 for your retirement after 20 years, how much do you have to save every year if the annual rate is 10%? ‘
7.An investment project will generate $200, $250, and $300 in the future year 1, year 2 and year 3 respectively. How much is this project worth to you, when the interest rate is 10%?
8.Loan A provides an annual rate of 3.125% but compounds the rate monthly. Loan B provides an annual rate of 3.15% with no cmopounding.
|10||Loan A provides an annual rate of 3.125% but compounds the rate monthly.|
|Loan B provides an annual rate of 3.15% with no compounding.|
|Which loan do you prefer when borrowing money? Please calculate the effective rates.|
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