On his son's fifth birthday, a man decides to deposit a certain amount which will be equivalent to 28,000 with today's purchasing power of the peso on his son's eighteenth birthday when he starts his college education. If the bank pays 5 1/2% interest compounded annually but the rate of inflation is 8.7% compounded annually, how much should the man deposit now?

Q: When you were born, your family started to deposit 1,000 USD each month in the bank. The bank offers…

A: Amount deposited each month in the bank = 1,000 USD  Annual deposited amount (PV) = 1,000 USD × 12…

Q: A man decides to deposit a certain amount of money on his son's 10th birthday, which will be…

A: As per Fisher's Method,  (1+i) = Real compounding rate (1+r) = Bank pays Annual Compound Rate (1+π)…

Q: On the birth of a child, the father wants to deposit a sum in a savings account. He intends to…

A: Sum Deposit = ? 20,000 every month for 4 years starting on 18th birthday Interest Rate = 10%…

Q: A young man has decided to go into business at the age 40. He wishes to accumulate P 200,000.00 at…

A: Future Value = 200,000 Current Value invested = x Deposit will increase each year by 10% Rate = 9.6%…

Q: money should he have

A: A retirement plan refers to the financial strategies of saving, investments, or distributing money…

Q: When you were born, your parents started to deposit monthly $2,000 in the bank. The bank offers a…

A: FV Ordinary Annuity=C×(1+i)n−1i where, C=cash flow per period i=interest rate=0.1512…

Q: Assume you deposit $5,900 at the end of each year into an account paying 11.75 percent interest.…

A: Annual deposit (P) = $ 5900 Annual interest rate (r) = 11.75%

Q: How much money can he receive on his 18th birthday, if he decided to withdraw all the money at once?

A: Time value of money (TVM) refers to the method used to measure the amount of money at different…

Q: 4. Vincent wants to deposit Php 5,000 at the end of each quarter, for 3 years in a bank that gives…

A: Given  Principal = 5,000 Rate (r) = 8% pa or 2 % (8% /4) quarterly Period (n) = 12 periods (3 Yrs…

Q: Charlotte wishes to accumulate $100,000 in a savings account in 10 years. If she wishes to make a…

A: Present value indicates the current value of a future earning or sum incurred in the future years…

Q: Peter has $10,000 that he can deposit in any three savings accounts for a 3- year period. Bank A…

A: Deposit = 10,000 Time Period of Deposits = 3 years   Bank A Annual Compounding Interest Rate = 4% N…

Q: Luis has $170,000 in his retirement account at his present company. Because he is assuming a…

A: This account works as a combination of two separate account: fixed principal of $170,000 compounded…

Q: Troy Long wishes to deposit a single sum of money into a savings account so that five equal annual.…

A: Total number of periods or years is 5 years Interest rate is 5% Annual withdrawal is $2000 To Find:…

Q: (Refer to this word problem. , Samuel wishes to have P500,000 available for his son's college…

A: Accumulated value (F) = P 500000 t = 14 years = 28 semiannual periods r = 4.4% per annum = 2.2%…

Q: A man deposits her annual bonus into a savings account that pays 8% interest compoundedannually. The…

A: In this question we need to calculate the amount in the saving account immediately after the fifth…

Q: How much money can they expect to withdraw?

A: Future value of ordinary annuity refers to the sum total value of all deposits made periodically at…

Q: A student plans to deposit P1,500 in a bank now and another P3,000 for the next two years. If he…

A: Amount left can be calculated using the formula of the future value.

Q: Mr. Doe is trying to decide whether to put his money in the XYZ Bank or the ABC Bank. The XYZ Bank…

A: Option 1 - XYZ Bank, 6% interest rate, compounded annually Option 2 - ABC Bank 5% interest rate,…

Q: Peter makes a deposit at the end of every three months into a savings account that earns interest at…

A: Annuity means no. of finite payments which are the same in size and made in equal intervals. Person…

Q: He wants to deposit his savings into a bank account. How much does Jacob have to deposit now in the…

A: Present Value The present value is the value of cash flow stream or the fixed lump sum amount at…

Q: Marwan just deposited $13,000 into his account at Bank Muscat. The bank will pay 2.3 percent…

A: Deposit amount (P) = $ 13000 Annual interest rate (R) = 2.3% Period (N) = 15 Years

Q: Joe plans to set aside money for his young daughter's college tuition. He will deposit money in an…

A: Future value of an annuity: Future value of the annuity is the annuity factor used to calculate the…

Q: You plan to deposit $500 in a bank account now and $600 at the end of the year. If the account…

A: Solution: The amount in account after second deposit will be the future value of first deposit and…

Q: Alfredo wants to know how much he must put in a bank account today to have within 14 years an amount…

A: As per the information provided: Future value of the invested amount = $20,000 Time = 14 years…

Q: An investor desires to deposit with a trust company a sum just sufficient to provide his family with…

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

Q: Derek will deposit $7,502.00 per year for 23.00 years into an account that earns 8.00%, The first…

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

Q: How much should the parents place at the end of each year into a savings account that earns an…

A: This problem expects the present value of 45,000.  interest = 4.8% period = 16 years   We also need…

Q: Suat opens a deposit account in a bank by depositing 10,000 TL. In addition, he will deposit 6,000…

A: Initial Deposit = 10,000 Deposit after one year = 6000 Deposit after two years = 4000 Value in…

Q: Kobe is retiring in 19 years, and wants to save some money. He will make bi-weekly deposits of…

A: Bi-weekly Deposit = $513.38 Time Period = 19 Years Interest Rate = 2.750% compounded semi-annually

Q: When you were born, your parents started to deposit monthly $2,000 in the bank. The bank offers a…

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

Q: On the day his son was born, a father deposited to a trust company a sufficient amount of money so…

A: The effective annual interest rate (EAR) is the real rate of return that exceeds the annual…

Q: t on the account is 10% compounded semi-annually, for how long does Laura have to deposit the money?…

A: The answer has been mentioned below.

Q: Alfredo wants to know how much he must put in a bank account today to have within 14 years an amount…

A: Here, To Find: Conversion rate to the current dollar and the present value of an investment with…

Q: A woman desires to have $400,000 in a savings account when she retires in 20 years. Because of the…

A: The future value of the cash flow is the future worth of a cash flow at a certain rate of interest…

Q: A man wishes to set aside some money for his daughter’s college education. His goal is to have a…

A: Time value of money- It is based on the concept that money earned today is worth more than similar…

Q: John would like to accumulate $100,000 by the time his son starts college in ten years.  What amount…

A: Given : Future Value =$100,000 Interest Rate = 5% Time = 10 years Compounding frequency per year  i)…

Q: if her dad deposits R3570,00  at the end of every six months for the next four years into a bank…

A: The Future Value of the annuity is the total value of all the payments which is occurred regularly…

Q: You want to have GH¢ 50,000 in your savings account five years from now, and you’re prepared to make…

A: In the given problem we need to find the Annual Deposit amount for 5 years which cumulates @9.5% to…

Q: A student plans to deposit P 2,000 in the bank now and another P 5, 000 each year for the next two…

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

Q: A mother wishes to have Php800,000 eight years from today for her son’s graduation. How much should…

A: Future value (FV) = Php800,000 Monthly interest rate (r) = 0.0116666666666667 (i.e. 0.14 / 12)…

Q: Bob wants to deposit $5000 into a bank account at the beginning of the next month and $200 per month…

A: This account can be divided into two account: principal amount $5000 at rate 3% pa compounded…

Q: On his son's fifth birthday, a man decides to deposit a certain amount which will be equivalent to…

A: given, FV = P28000 NOMINAL RATE = 5.5% INFLATION = 8.7% N = ( 18-5) = 13 YEARS

Q: Starting next year, Moussa Al Khatib will need $10,000 annually for 4 years to complete his…

A: Given information: Amount needed in next year $10,000 Number of years 4 Interest rate is 5%.

Q: Benjamin receives an annual bonus of $1,000 and wants to invest it in an account that earns interest…

A: There are two types of interest calculated: simple interest and compound interest. The simple…

Q: Mike is planning to take a Caribbean vacation in two years. In order to save money for the trip, he…

A: future value is the value of the the present cashflow at future date. formula: compound interest fv=…

Q: If he deposits 2000 at the end of every year into a special account for seven years and the bank…

A: This problem can be solved in light of annuity and future value. Total amount in the deposit account…

Q: A high school student would like to save P50,000 for his graduation. How much should he deposit in a…

A: The amount required in the future is the future value of periodic deposits. This is the compounded…

Q: If Rex wants to be a millionaire by the time he retires (45 years from now), how much does he need…

A: Present Value: It represents the present worth of the future amount and is computed by the…

Amortized Loans

The term "amortization" refers to spreading the value of a loan or a debt over a series of regular payments or installments comprising of both the principal and interest amount. It generally involves the process where in the value of a loan or an intangible asset is written down over its maturity period.