Josh is planning to withdraw $9000 from a savings account at the end of each quarter for 3 years. If the payments are deferred for 6 years and interest is 5.75% compounded semi-annually, what amount must be invested now into the savings account? Rose has saved $90 000. If she decides to withdraw $4000 at the beginning of each month and interest is 6.25% compounded annually, for how long can she make withdrawals?

Q: The Weidmans want to save $40,000 in 2 years for a down payment on a house. If they make monthly…

A: Given that;Future value is $40000Interest rate is 12%We need to take the present value as $0

Q: Jimmy wants to buy a taxi 6 years later. He will need $550,000 as the down payment. He initially…

A: Part (a): Answer: Annual effective rate of interest is 6.14%

Q: Matt is saving to buy a new motorcyce. If he deposits $60 at the end of each month in an account…

A: The amount at the end of 15 months can be calculated with the help of future value of annuity…

Q: Lauren plans to deposit $5000 into a bank account at the beginning of next month and $225/month into…

A: Annuity refers to series of annual payment which is paid or received at start or end of specific…

Q: Gabriela wants to withdraw $5,000 from her account at the end of 5 years, and $7,000 at the end of 6…

A: Since Gabriela wants to withdraw a specific amount after a certain period of time, thus, it is…

Q: Sarafina is making monthly payments into an annuity. She wants to have $600 in the fund to buy a new…

A: Monthly payment The minimum amount needed every month to be paid by an individual.

Q: Francine currently has $70,000 in her 401k account at work, and plans to contribute $7,000 each year…

A: Current amount (PV) = $ 70000 Annual deposit (P) = $ 7000 Interest rate (r) = 6% Number of annual…

Q: At retirement, Maria's saving account has $620,000 in it and is earning 1.2% compounded monthly.…

A: The present value is the value of the sum received at time 0 or the current period. It is the value…

Q: John and Rosamond want to retire in 15 years and can save $150 every three months. They plan to…

A: A= $150 r=6.72% n=15 m=4

Q: Lauren plans to deposit $5000 into a bank account at the beginning of next month and $200/month into…

A: Future value is the amount accumulated on the deposit made along with interest earned on the…

Q: Nick saves $175 per month, deposited directly into his credit union account on payday, the last day…

A: In order to calculate the amount at the end of a specific period of time, the future value of the…

Q: Jane just turns 30 years old and wants to start a savings plan, where she contributes $X every month…

A: Given:

Q: How much should Ryan have in a savings account that is earning 2.50% compounded monthly, if he plans…

A: Present Value of Annuity: It represents the present worth of the future cash flows stream and is…

Q: Cooper wants to save for college. Assuming he puts $5,000 into an account at the end of each year…

A: Money invested anywhere changes in value with the change in time. This is simply understood as the…

Q: Gertrude wants to make $500 monthly withdrawals for 10 years from an account which pays 4%…

A: A concept that implies the future worth of the money is lower than its current value due to several…

Q: Bob and Pat want to purchase a vacation home in ten years and need $45,000 for a down payment. How…

A: Time value tells that money received today has more value than that of receiving exact value later…

Q: Thomas is planning to withdraw $7000 from a savings account at the end of each quarter for three…

A: Since you have asked multiple questions, we will solve the first question for you. If you want any…

Q: Emek is planning to retire in 15 years. She decides to start saving toward building up a retirement…

A: Here,

Q: Rachael also wishes to save for retirement. She can comfortably afford to invest R8 500 at the end…

A: Firstly calculate future value of annuity = P*[((1+r)^n)-1]/r Where P =Periodic payment i.e. 8500 r…

Q: Alicia has $350,000 saved for retirement in an account earning 3.2% interest, compounded quarterly.…

A: Present Value of Annuity = Annuity Amount * [ {1 / ( 1 + periodic interest rate ) } + {1 / ( 1 +…

Q: naline wants to have 5000 dollars after 6 years in the account that draw a nominal interest of 7…

A: The future value of goes on increasing as there is more compounding over the period of time.

Q: Francine currently has $70,000 in her 401k account at work, and plans to contribute $5,000 each year…

A: Future value of single sum/lump sum investment and annuity payments can be calculated by using this…

Q: Helen thinks she will need to replace the fence around her business in 6 years at an estimate of…

A: In this question one has to solve the present value. Now present value is the value of an asset in…

Q: Anna is buying $17,000 worth of rare coins as an investment. The dealer is charging her an annual…

A: Add-on interest loans combine the principal and interest into one amount that is owed and later paid…

Q: ants to make a few deposits so that she can withdraw $5000 per year at the end of each year for the…

A: Investment: It is the amount which is invested by the individual into the bank to earn interest…

Q: Robert recently borrowed $20,000 to purchase a new car. The car loan is fully amortized over 4…

A: Ordinary annuity are the PMTs which are made at the end of the period.

Q: thomas is planing to withdraw $6000 from savings account at the end of each quarter for five years.…

A: Interest rate Is 5.38% Compounded Semi annually Amount of Witdrawal is $6,000 Time period of with…

Q: Danny wants to save some money using the following schedule. Starting today, he will make $100…

A: Future value of annuity ( FVA) is stream of recurring cashflow compounded at specified rate to…

Q: for how many years will she be able to  make those $3,600 withdrawals before the money runs out?

A:

Q: Rose has saved $90 000. If she decides to withdraw $4000 at the beginning of each month and interest…

A: Present value is the value of the amount in current time that is expected to be received in future…

Q: Karen wants to have $22,559 in her investment account in 5 years. If her bank offers an annual…

A: Following details are given in the question : Future value = $22559 Time period = 5 years Interest…

Q: Ginny is planning for her son's college education to begin five years from today. She estimates the…

A: Frist we need to calculate present value of annuity due by using this formula PV of annuity due…

Q: ING has saved ​$73,800.00. If she decides to withdraw ​$2,727.00 at the beginning of every three…

A: The present value of an annuity is the current worth of a series of cash flows at a certain rate of…

Q: Anna is buying ​$16,000 worth of rare coins as an investment. The dealer is charging her an annual…

A: Principal = $16,000 rate = 7.2% Interest for 48 months = $16,000*7.2%*4 = $4608

Q: Tony Sanchez plans to retire and to withdraw 10 annual withdrawals that will start at P60,000 at the…

A: The initial deposit will be the sum of the present value of all the withdrawals in the future.

Q: Darwin is a young entrepreneur trying to keep his business afloat. He has missed two payments to a…

A: We will use the concept of time value of money here. As per the concept of time value of money the…

Q: To finance a vacation in 4 years, Elsie saves $450 at the beginning of every six months in an…

A: Future Value The future value is the amount that will be received at the end of a certain period.…

Q: ants to make a few deposits so that she can withdraw $5000 per year at the end of each year for the…

A: The present value of future cash flow is the equivalent value of money today considering the…

Q: Patricia French received $500,000 from aninsurance company after her husband’s death. Patricia wants…

A: Monthly payment: It can be defined as the payment made by the borrower on a monthly basis.

Q: Jennifer Creek is saving up for a new car. She wants to finance no more than $10,000 of the $26,000…

A: The future value function can be used to determine the future value of a present sum of cash flow,…

Q: Lauren plans to deposit $4000 into a bank account at the beginning of next month and $200/month into…

A: A lumpsum payment is made at the beginning of next month. Future value of this lumpsum at the end of…

Q: An individual wants to have 1,000,000 AED in 10 years. Suppose she will pay no taxes at the end of…

A: According to the question, an individual wants 1,000,0000 AED in 10 years i.e. the amount of…

Q: Juan has a goal of saving up $56,397 by making biweekly (26 per year) deposits into a savings…

A: GIVEN, FV = $56,397 M=26 PER YEAR N=9 R=0.6%

Q: Dory deposits a certain amount of money into her savings account at the beginning of each quarter…

A: Future value of a present value is the value of that amount after taking into account the time value…

Q: Joan earns a salary of $110,000 per year, and she expects to receive increases at a rate of 4% per…

A: An investment is a financial instrument that is bought with the motive of appreciation in value in…

Q: Assuming that a $45,000 shop loan is financed at 12% over 4 years, what is the monthly shop payment?…

A: 2.  Loan amount = $45000      Interest -12%      Period = 4 years Amount (A) = P* [i *…

Q: Janet decided to pay a lump sum payment of $51000 so she will be able to make 6 years of quarterly…

A: Payment is the transfer, in appropriate amounts, of money, goods or services in return for goods and…

Q: Edna invests $30,000 and buys an annuity that pays $2000 every 6 months (1st payment 6 months from…

A: Open MS Excel --> Go to formulas --> Use FV function(Future value) Calculate the future value…

Cost of Credit

The cost of credit is an extra amount that the borrower has to pay besides the loan amount. These credit charges may vary from loan to loan. The cost of credit includes interest charges, maintenance charges, and arrangement charges. Some of the costs are mandatorily collected by the lender based on the loan amount and tenure of the loan. The cost of credit is also called finance charges of the credit.