Question
1.) Your job pays you only once a year for all the work you did over the previous 12 months. Today, December 31, you just
1.) Your job pays you only once a year for all the work you did over the previous 12 months. Today, December 31, you just received your salary of $60,000 and you plan to spend all of it. However, you want to start saving for retirement beginning next year. You have decided that one year from today you will begin depositing 2 percent of your annual salary in an account that will earn 8 percent per year. Your salary will increase at 4 percent per year throughout your career. How much money will you have on the date of your retirement 36 years from today?
A. $23,181.38
B. $355,927.18
C. $958,090.31
D. $370,164.27
E. $362,760.98
2.) You are looking at a one-year loan of $15,000. The interest rate is quoted as 12 percent plus 3 points. A point on a loan is simply 1 percent (one percentage point) of the loan amount. Quotes similar to this one are common with home mortgages. The interest rate quotation in this example requires the borrower to pay 3 points to the lender up front and repay the loan later with 12 percent interest. What rate would you actually be paying here?
A. 13.92%
B.15.46%
C. 8.64%
D. 17.01%
E. 12.00%
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started