Question
Please show work. A) You save for retirement over 30 years by investing $850/month in a stock account that yields 10%. You invest $350/month in
Please show work.
A) You save for retirement over 30 years by investing $850/month in a stock account that yields 10%. You invest $350/month in a bond account that yields 6%. At retirement you combine both accounts into a new account that yields 5%. How much can you withdraw each month assuming a 25 year withdrawal period?
B) You want to be a millionaire when you retire in 40 years. How much do you have to save each month if you earn 10.5% per year? How much do you have to save if you wait 10 years before you start investing?
C) You wan to buy a new car for $68,000. The loan is for 60 months with payment at the beginning of the period (annuity due). The APR is 6.4%. What will the monthly payments be?
D) What is the EAR for 7% compounded quarterly, monthly, daily?
E) What is the APR when the EAR is 12.4% compounded semiannually? When the EAR is 11.7% compounded monthly? When the EAR is 9.5% compounded weekly?
F) FNB charges 12.4% compounded monthly on its business loans. First United Bank charges 12.7% compounded semi-annually. As a potential borrower, which bank would you go to for a new loan?
G) You want to buy a new sports car for $79,500 and the finance office at the dealership quoted you an APR of 5.8% for a 60 month loan. What are your monthly payments? What is the EAR?
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started