1. Your daughter has just given birth to your first grandchild. You decide to st
ID: 2633536 • Letter: 1
Question
1. Your daughter has just given birth to your first grandchild. You decide to start a college fund for the child. You want the fund to have $300,000 in it when the child turns 18. You think you can get a return of 10% per year on your investment. How much should you deposit in the fund?
2. You want to buy a car. To do so, you will need to take out a loan in the amount of $22,000. The longest you are willing to pay on the loan is five years. The interest rate on this type of loan is 5.0% per year.
How much will the equal monthly payments be?
Explanation / Answer
1) Present Value of 30000 = 300000/(1+10%)^18
=$53957.64
2) Mothnly Installments = PMT(5%/12,12*5,22000)
=$415.17
Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.