1.You are saving to buy a car, and you deposit $100at the end of each month for two years at an APR of2.4%compounded monthly. What is the future value for this savings arrangement? 

That is, how much money will you have for the purchase of the car after two years? (Round your answer to the nearest cent.)

 

2.At your child's birth, you begin contributing monthly to a college fund. The fund pays an APR of4.5% compounded monthly. You figure your child will need $40,000at age 18 to begin college. What monthly deposit is required? (Round your answer to the nearest cent.)

3.Suppose you want to save in order to purchase a new boat. Take the APR to be7.2%.

If you deposit $300each month, how much will you have toward the purchase of a boat after three years? (Round your answer to the nearest cent.) $?

4.You plan to work for 40 years and then retire using a 25-year annuity. You want to arrange a retirement income of $4600per month. You have access to an account that pays an APR of7.2% compounded monthly.

What size nest egg do you need to achieve the desired monthly yield? (Round your answer to the nearest cent.) $?

5.You plan to work for 40 years and then retire using a 25-year annuity. You want to arrange a retirement income of $6000per month. You have access to an account that pays an APR of8.4% compounded monthly. This requires a nest egg of$751,409.49.

What monthly deposits are required to achieve the desired monthly yield at retirement? (Round your answer to the nearest cent.) $?

6.We are considering the effects of starting early or late to save for retirement. Assume that each account considered has an APR of 6% compounded monthly.

Against expert advice, you begin your retirement program at age 40. You plan to retire at the age of 65. What monthly contributions do you need to make to save up a nest egg of $267,699.63? (Round your answer to the nearest cent.) $?

7.We consider the effects of starting early or late to save for retirement. Assume that each account considered has an APR of 6% compounded monthly. If you begin by depositing $45each month into an account at age 20, your nest egg if you retire at age 65 will be $124,019.67. If you start making monthly contributions at age 40 and plan to retire at age 65, your monthly contributions will be much higher in order to match this nest egg amount. Compare your monthly deposit of $45at the age of 20 to your monthly deposit at the age of 40. Compare the total amount deposited in each case.

Answer rating: 100% (QA)

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