Sarah is thinking about taking out a loan. The interest rate is 6.00 % p.a. and is calculated quarterly. Sarah would be making payments every month (so this is a general annuity). What is the effective rate as a decimal (not a percentage) ?
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- We can now use the following formula to find the present value of the account where the annuity payments are $400 each month. present value = table factor ✕ annuity payment The table factor was determined to be 21.67568. Before using the above formula, we must add 1 to the table factor since this is an annuity due. Thus, the table factor to use in the formula is 21.67568 + 1 = . Substitute the values into the formula, rounding the result to the nearest cent. present value = table factor ✕ annuity payment = ✕ 400 = $ Therefore, to receive annuity payments of $400 at the beginning of each month for 2 years, the amount that should be deposited now into an account earning 6% interest compounded monthly, to the nearest cent, is $ .If you borrow $9000 at an annual percentage rate (APR) of r (as a decimal) from a bank, and if you wish to pay off the loan in 3 years, then your monthly payment M (in dollars) can be calculated using: M = 9000 (er/12-1) / 1 - e-3r 1) Describe what M (0.035) would represent in terms of the loan, APR, and time. 2) If you are only able to afford a max monthly payment of $300, describe how you could use the above formula to figure out what the highest interest rate the bank could offer you and you would still be able to afford the monthly payments. In addition, determine the maximum interest rate that you could afford.Percentages need to be entered in decimal format, for instance 3% would be entered as .03 in the interest rate cells.) If Samantha invests $700 today in an account that pays 4% interest compounded annually, how much will she have in her account four years from today? How much will she have in eight years and 12 years from today? (Use Future Value of a Lump Sum) What is the present value of $1,500 due in 14 years at a 5% interest rate? At a 10% interest rate? Explain why the present value is lower when the interest rate is higher. (Use Present Value of a Lump Sum) Matt is considering the purchase of an investment that will pay him $12,500 in 12 years. If Matt wants to earn a return equal to 7% per year (annual compounding), what is the maximum amount he should be willing to pay for the investment today? (Use Present Value of a Lump Sum Amount) At the end of each of the past 14 years, Vanessa deposited $450 in an account that earned 8% compounded annually. How much is in…
- Use graphical approximation techniques or an equation solver to approximate the desired interest rate. A person makes annual payments of $1000 into an ordinary annuity. At the end of 5 years, the amount in the annuity is $ l5764.52. What annual nominal compounding rate has this annuity earned? Type the interest rate % (round to 2 decimal places)Give typing answer with explanation and conclusion to all parts If $387674 is used to purchase an annuity earning 5.5% compounded monthly and paying $3102 at the end of each month, what will be the term of the annuity? Include the final, smaller annuity payment in the total. (Just state total months as a number, not years and months) What is N? What is I/Y? What is C/Y? What is P/Y? What is PV? What is PMT? What is FV?If you put $1,000 in a savings account that pays interest at the rate of 3 percent, compounded annually, how much will you have in 7 years? Round the answer to the nearest cent. Round FV-factor to three decimal places or use the Appendix A . (Hint: Use the future value formula.) $ How much interest will you earn during the 7 years? Round the answer to the nearest cent. $ If you put $1,000 at the end of each year into a savings account that pays interest at the rate of 3 percent a year, how much would you have after 7 years? Use the Appendix B . Round the answer to the nearest cent. Round FV-factor to three decimal places. $
- Percentages need to be entered in decimal format, for instance 3% would be entered as .03 in the interest rate cells.) At the end of each of the past 14 years, Vanessa deposited $450 in an account that earned 8% compounded annually. How much is in the account today? How much would be in the account if the deposits were made at the beginning of each year (PMT Type) than at the end of each year? (Use Future Value of an Annuity) Suppose your opportunity cost (interest rate/year) is 11% compounded annually. How much must you deposit in an account today if you want to pay yourself $230 at the end of each of the next 15 years? How much must you deposit if you want to pay yourself $230 at the beginning of each of the next 15 years? Bruce invested $1,250 (present value - enter as a negative number) 10 years ago. Today, the investment is worth $3,550 (future value). If interest is compounded annually, what annual rate of return did Bruce earn on his investment? (Use Solving for r…Suppose you deposit $10 every week into an account that earns 4% interest compounded weekly. How much money (to the nearest cent) will you have in the account after 5 years? Summarize the information provided, stating the interest rate in a decimal form. d = r = N = k = Solve the problem and give your answer hereRecently, More Money 4U offered an annuity that pays 6.9% compounded monthly. If $1,038 is deposited into this annuity every month, how much is in the account after 7 years? How much of this is interest? Type the amount in the account: $ (Round to the nearest dollar.) Type the amount of interest earned: $ (Round to the nearest dollar.)
- If you deposit money today in an account that pays 8% annual interest, how long will it take to double your money? Round your answer to two decimal places.Use a calculator to evaluate an ordinary annuity formula for m, r, and t (respectively). Assume monthly payments. (Round your answer to the nearest cent.) $20; 4%; 30 yr A = $Tom wants to put aside $120 at the end of each month into an account earning 6% compounded monthly, and have 30,000 at the end of ten years. How much would tom’s initial balance have to be? Savings lans are one of the common types of annuities. As stated earlier, an annuity is a series of equal payments amde at regular intervals. We will look at ordinary annuities in which payments are made at the end of each period. The futrue value of an ordianry annuity formula is A is the future value r is the annual interest rate n is the number of interest periods per year t is the number of years m is the regular payment