A person invested P11,186.3 when his son was 7 years old, P15,194.58 when he turned 8, and P18,314.22 for the next 5 years. If the interest rate is 0.161, how much will his son receive annually starting on his 26th birthday? >Answer in 4 decimal places. Use knowledge about annuities in solving. Thank you.
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Given problem:
A person invested P11,186.3 when his son was 7 years old, P15,194.58 when he turned 8, and P18,314.22 for the next 5 years. If the interest rate is 0.161, how much will his son receive annually starting on his 26th birthday?
>Answer in 4 decimal places. Use knowledge about
Step by step
Solved in 2 steps
- . Problem 5.03 (Finding the Required Interest Rate) еВook Your parents will retire in 16 years. They currently have $400,000 saved, and they think they will need $2,100,000 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.Follow the sequence: 1. Given 2. Formula to be used: 3. Required 4. Cash flow diagram (for annuity problems) 5. Manual Solution (box the final answer) A man wishes to prepare the future of his 10-year-old son. Determine the monthlysavings that the man should make with interest of 5.41% per annum to amount P120,000 at the time his son will be 184. Suppose you make an annual contribution of BD300 each year to a college education fund for a niece. She is 4 years old now, and you will start next year and make the last deposit when she is 18. The fund is a money market account earning 6.5%/year. What will it be worth immediately after the last deposit? You may also set up spreadsheet solution AGE Beginning Balance Ending Balance Deposit Interest
- 5. You decide to invest $100 into a savings account with an interest rate of 2% annually in2015. The amount of money in your savings account in a given year can be modeled by the following function. P(t)=100(10)^.009 a. Evaluate P(0) and explain what it means in this context. b. Approximately how many years will it take for the amount of money in your bank account to reach $120? c. What year will you have $120 in your savings account?Practice (Simple and Compound) 9. Beau's grandmother started depositing $1000 in a saving account for him each year on his birthday. The account pays 2.5% simple interest. How much interest will the account earn after year 3? Round to the nearest cent. Directions: 1. Write the formula: 2. What are you looking for? 3. Numbers involve in the formula:2. If you decided to save the entire $20,000 from your lottery payment each year for the next 20 years at 3%, how much would you have saved up in your bank account?
- Refer to the present value table information on the previous page. What amount should Brett have in his bank account today, before withdrawal, if he needs 2,000 each year for 4 years, with the first withdrawal to be made today and each subsequent withdrawal at 1-year intervals? (Brett is to have exactly a zero balance in his bank account after the fourth withdrawal.) a. 2,000 + (2,000 0.926) + (2,000 0. 857) + (2,000 0.794) b. 2,0000.7354 c. (2,000 0.926) + (2,000 0.857) + (2,000 0.794) + (2,000 0.735) d. 2,0000.9264Use the tables in Appendix B to answer the following questions. A. If you would like to accumulate $2,500 over the next 4 years when the interest rate is 15%, how much do you need to deposit in the account? B. If you place $6,200 in a savings account, how much will you have at the end of 7 years with a 12% interest rate? C. You invest $8,000 per year for 10 years at 12% interest, how much will you have at the end of 10 years? D. You win the lottery and can either receive $750,000 as a lump sum or $50,000 per year for 20 years. Assuming you can earn 8% interest, which do you recommend and why?Solve the following problems on a sheet of paper. What Have I Learned So Far? Solve the following problems on a sheet of paper. Your parents wanted to establish a travel fund that will provide them an annual traver 1. allowance of P250 000 for 10 years when they retire, How much should they invest in a trust fund that earns 4% interest compounded monthly if they are to retire in 5 years? 2. How much should a mother invest now for a long-term investment that offers 10% interest compounded monthly if she desires to provide her son a 5-year college fund of P120 000 annually, 6 years from now?
- 4. Suppose you make an annual contribution of BD100 each year to a college education fund for a niece. She is 4 years old now, and you will start next year and make the last deposit when she is 18. The fund is a money market account earning 6.5%/year. What will it be worth immediately after the last deposit? You may also set up spreadsheet solution6: You invest $10000 today for 9 years at 6% interest. What is the total amount of interest on interest earned over the life of the investment? You invest $2000 today at 7% per year. 7: If you leave this for your grandchildren by not touching the account for 80 years, what is the amount of interest on interest earned for this investment? please also explain how to solve this using a financial calculator. The most important thing is that I understand so I can solve this on my own Thank YouSuppose you have $10,000 to invest for the next 30 years. You are given 3 choices on where to invest your money. Account #1 Account #2 Account #3 a. Calculate the APR (assume P-$100, -1 year) for each account. Round to 2 decimal places, in percent form. Account #1 15.21% compounded monthly 15.18% compounded daily 15.16% compounded continuously SHOW YOUR WORK BELOW.
