Question
a. If you wish to have $250,000 in a savings account at the end of 10 years and you expect the account to earn a
a. If you wish to have $250,000 in a savings account at the end of 10 years and you expect the account to earn a nominal rate of 6% per year compounded monthly how much will you need to deposit per month?
b. If Miss Taylor finances $200,000 for a home at a nominal rate of 5.3% compounded monthly for 30 years, what will her monthly payment be?
c. A company wishes to make an investment now that is expected to generate a profit of $20,000 next year and decrease by $500 each year thereafter for a total of 20 years. How much should the company be willing to invest if they prefer to earn 10% per year on their investments? )
d. Suppose I invest $10,000 today and would like to have $20,000 five years from now. What interest must I earn per year?
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