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75. (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 to repay them the $20,000, without any interest, in a 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 won't be able to repay the lump sum without saving up. So you decide 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 at , to 50 come you you realize that ear о payment on your college loans, which will be paid off after 10 years). se is the ears 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 275, r = 0.05 (annual 60, and the savings formula with r ceе. rate), and n = replaced by r/12 (the monthly interest rate). You will find that the amournt 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. t neet, ities

75. (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 to repay them the $20,000, without any interest, in a 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 won't be able to repay the lump sum without saving up. So you decide 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 at , to 50 come you you realize that ear о payment on your college loans, which will be paid off after 10 years). se is the ears 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 275, r = 0.05 (annual 60, and the savings formula with r ceе. rate), and n = replaced by r/12 (the monthly interest rate). You will find that the amournt 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. t neet, ities

Pfin (with Mindtap, 1 Term Printed Access Card) (mindtap Course List)
Pfin (with Mindtap, 1 Term Printed Access Card) (mindtap Course List)
7th Edition
ISBN:9780357033609
Author:Randall Billingsley, Lawrence J. Gitman, Michael D. Joehnk
Publisher:Randall Billingsley, Lawrence J. Gitman, Michael D. Joehnk
Chapter14: Planning For Retirement
Section: Chapter Questions
Problem 2FPE
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How do I calculate the interest in excel?

75. (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 to repay them the $20,000, without any interest, in a 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 won't be able to repay the lump sum without saving up. So you decide 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 at , to 50 come you you realize that ear о payment on your college loans, which will be paid off after 10 years). se is the ears 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 275, r = 0.05 (annual 60, and the savings formula with r ceе. rate), and n = replaced by r/12 (the monthly interest rate). You will find that the amournt 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. t neet, ities
Transcribed Image Text:75. (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 to repay them the $20,000, without any interest, in a 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 won't be able to repay the lump sum without saving up. So you decide 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 at , to 50 come you you realize that ear о payment on your college loans, which will be paid off after 10 years). se is the ears 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 275, r = 0.05 (annual 60, and the savings formula with r ceе. rate), and n = replaced by r/12 (the monthly interest rate). You will find that the amournt 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. t neet, ities
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