. Metro by T-Mobile LTE 8:52 AM 100% Spreadsheet helpful) Suppose that your parents are willing to lend you $20,000 for part of the cost of your college education and living expenses. They want you them the $20,000, without any interest, in a to repay lump sum 15 years after you graduate, when they plan to retire and move. Meanwhile, you will be busy repaying federally guaranteed loans for the first 10 years after graduation. But you realize that you won't be able to repay the lump sum without saving up. cide that you will put aside money in an interest-bearing account every month for the five years before the payment is due. You feel comfortable with putting aside $275 a month (the amount of the So you payment on your college loans, which will be paid off after 10 years) How high an annual nominal interest rate on savings do you need to accumulate the $20,000 in 60 months, if interest is compounded monthly? Enter into a spreadsheet the values d 5 275, r 5 0.05 (annual rate), and n 5 60, and the savings formula with r replaced by r/12 (the monthly interest rate). You will find that the amount accumulated is not enough. Change r to 0.09; it's more than enough. Try other values until you determine r to two decimal places
. Metro by T-Mobile LTE 8:52 AM 100% Spreadsheet helpful) Suppose that your parents are willing to lend you $20,000 for part of the cost of your college education and living expenses. They want you them the $20,000, without any interest, in a to repay lump sum 15 years after you graduate, when they plan to retire and move. Meanwhile, you will be busy repaying federally guaranteed loans for the first 10 years after graduation. But you realize that you won't be able to repay the lump sum without saving up. cide that you will put aside money in an interest-bearing account every month for the five years before the payment is due. You feel comfortable with putting aside $275 a month (the amount of the So you payment on your college loans, which will be paid off after 10 years) How high an annual nominal interest rate on savings do you need to accumulate the $20,000 in 60 months, if interest is compounded monthly? Enter into a spreadsheet the values d 5 275, r 5 0.05 (annual rate), and n 5 60, and the savings formula with r replaced by r/12 (the monthly interest rate). You will find that the amount accumulated is not enough. Change r to 0.09; it's more than enough. Try other values until you determine r to two decimal places
PFIN (with PFIN Online, 1 term (6 months) Printed Access Card) (New, Engaging Titles from 4LTR Press)
6th Edition
ISBN:9781337117005
Author:Randall Billingsley, Lawrence J. Gitman, Michael D. Joehnk
Publisher:Randall Billingsley, Lawrence J. Gitman, Michael D. Joehnk
Chapter7: Using Consumer Loans
Section: Chapter Questions
Problem 11FPE
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What is the interest rate, monthly deposits, time amount, target Amount, actual Amount and different? And what is the final answer to the question? I'm really lost right now. I was told to use the (saving formula for this)
Transcribed Image Text:. Metro by T-Mobile LTE
8:52 AM
100%
Spreadsheet helpful) Suppose that your parents are
willing to lend you $20,000 for part of the cost of your
college education and living expenses. They want you
them the $20,000, without any interest, in a
to
repay
lump sum 15 years after you graduate, when
they plan to retire and move. Meanwhile, you will be
busy repaying federally guaranteed loans for the first
10 years after graduation. But you realize that you
won't be able to repay the lump sum without saving up.
cide that you will put aside money in
an interest-bearing account every month for the five
years before the payment is due. You feel comfortable
with putting aside $275 a month (the amount of the
So you
payment on your college loans, which will be paid off
after 10 years)
How high an annual nominal interest rate on savings
do you need to accumulate the $20,000 in
60 months, if interest is compounded monthly? Enter
into a spreadsheet the values d 5 275, r 5 0.05 (annual
rate), and n 5 60, and the savings formula with r
replaced by r/12 (the monthly interest rate). You will
find that the amount accumulated is not enough.
Change r to 0.09; it's more than enough. Try other
values until you determine r to two decimal places
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