Question
1a). Chaneil opens up a Schwab IRA and places $2,000 in his retirement account at the beginning of each year for 10 years. He believes
1a). Chaneil opens up a Schwab IRA and places $2,000 in his retirement account at the beginning of each year for 10 years. He believes the account will earn 5 percent interest per year, compounded quarterly. How much will he have in his retirement account in 10 years?
1b.) The city of Bent borrows $48 million by issuing municipal bonds to help build the Arizona Cardinals football stadium. It plans to set up a sinking fund that will repay the loan at the end of 10 years. Assume a 4 percent interest rate per year. What should the city place into the fund at the end of each year to have $48 million in the account to pay back their bondholders?
1c). Calculate the monthly mortgage payment made at the beginning of each month on a $100,000 mortgage. The mortgage is for fifteen years and the interest rate is 5.5 percent.
1d) Donavan plans to retire at the age of 65 and believes he will live to be 90. Donavan wants to receive an annual retirement payment of $50,000 at the beginning of each year. He sets up a retirement account that is estimated to earn 6 percent annually.
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