. Metro by T-Mobile LTE8:52 AM100%Spreadsheet helpful) Suppose that your parents arewilling to lend you $20,000 for part of the cost of yourcollege education and living expenses. They want youthem the $20,000, without any interest, in atorepaylump sum 15 years after you graduate, whenthey plan to retire and move. Meanwhile, you will bebusy repaying federally guaranteed loans for the first10 years after graduation. But you realize that youwon't be able to repay the lump sum without saving up.cide that you will put aside money inan interest-bearing account every month for the fiveyears before the payment is due. You feel comfortablewith putting aside $275 a month (the amount of theSo youpayment on your college loans, which will be paid offafter 10 years)How high an annual nominal interest rate on savingsdo you need to accumulate the $20,000 in60 months, if interest is compounded monthly? Enterinto a spreadsheet the values d 5 275, r 5 0.05 (annualrate), and n 5 60, and the savings formula with rreplaced by r/12 (the monthly interest rate). You willfind that the amount accumulated is not enough.Change r to 0.09; it's more than enough. Try othervalues until you determine r to two decimal places

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Asked Nov 12, 2019
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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) 

. 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
help_outline

Image Transcriptionclose

. 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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Expert Answer

Step 1

Calculation of interest ...

В
E
Trial and error method
1
2 Interest rate Monthly deposit Period (months) Target amount Monthly interest rate
0.005
0.005833333
19,186.76
19,688.05
6.00%
-275
60
7.00%
-275
60
7.50%
-275
60
19,944.95
20,002.04
0.00625
5
7.61%
-275
60
0.006341667
0.006666667
8.00%
-275
60
20,206.14
7
mst
O
help_outline

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В E Trial and error method 1 2 Interest rate Monthly deposit Period (months) Target amount Monthly interest rate 0.005 0.005833333 19,186.76 19,688.05 6.00% -275 60 7.00% -275 60 7.50% -275 60 19,944.95 20,002.04 0.00625 5 7.61% -275 60 0.006341667 0.006666667 8.00% -275 60 20,206.14 7 mst O

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