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3. Problem 5.03 (Finding the Required Interest Rate) eBook Your parents will retire in 18 years. They currently have $380,000 saved, and they think they
3. Problem 5.03 (Finding the Required Interest Rate) eBook Your parents will retire in 18 years. They currently have $380,000 saved, and they think they will need $1,350,000 at retirement. What annual interest rate must they earn to reach their goal, assuming they don't save any additional funds? Round your answer to two decimal places. % 14. Problem 5.34 (Amortization Schedule) eBook Problem Walk-Through a. Complete an amortization schedule for a $13,000 loan to be repaid in equal installments at the end of each of the next 3 years. The interest rate is 9% compounded annually. If an amount is zero, enter "0". Do no round intermediate calculations. Round your answers to the nearest cent. Beginning Balance Repayment of Principal Remaining Balance Payment Interest Year 1 $ $ $ $ 2 3 b. What percentage of the payment represents interest and what percentage represents principal for each of the 3 years? Do not round intermediate calculations. Round your answers to two decimal places. % Interest % Principal Year 1: % % Year 2: % % Year 3: % % Why do these percentages change over time? I. These percentages change over time because even though the total payment is constant the amount of interest paid each year is declining as the remaining or outstanding balance declines. II. These percentages change over time because even though the total payment is constant the amount of interest paid each year is increasing as the remaining or outstanding balance declines. III. These percentages change over time because even though the total payment is constant the amount of interest paid each year is declining as the remaining or outstanding balance increases. IV. These percentages change over time because even though the total payment is constant the amount of interest paid each year is increasing as the remaining or outstanding balance increases. V. These percentages do not change over time; interest and principal are each a constant percentage of the total payment. -Select- = = 2 >
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