Question
Please answer both parts of question 7a. Let's say Lisa at 25, plans to retire at 65, and estimates that you will need $9,290 per
Please answer both parts of question
7a. Let's say Lisa at 25, plans to retire at 65, and estimates that you will need $9,290 per month at the end of each month upon retirement for the next 30 years. How much do you need to contribute at the end of each month until you reach age 50? Assume your estimated return is 8.1% EAR, that you have $10,000 already invested, and the funds will continue to earn interest to age 65, even though you will not continue contributing after age 50.
7b. Let's say Lisa buys a $501,962 home. she can put $90,000 down and can finance at 7.9% APR Monthly for 30 years, but can only afford to pay $1,163, for the first five years, and have offered to make a balloon payment of $100,000 at the end of thirty years (her 360th payment). How much will her remaining payments be? (Assume all payments will be made at the end of each month, and that negative amortization is permitted.)
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