q 13 A local furniture store is advertising a deal in which you buy a $6,000 living room set with three years before you need to make any payments (no interest cost is incurred). How much money would you have to deposit now in a savings account earning 6 percent APR, compounded monthly, to pay the $6,000 bill in three years? (Do not round intermediate calculations and round your final answer to 2 decimal places.) PRESENT VALUE? How much would you have to deposit in the savings account each month 6 percent APR to be able to pay the bill? (Do not round intermediate calculations and round your final answer to 2 decimal places.) ANNUITY PAYMENT?

q 13 A local furniture store is advertising a deal in which you buy a $6,000 living room set with three years before you need to make any payments (no interest cost is incurred). How much money would you have to deposit now in a savings account earning 6 percent APR, compounded monthly, to pay the $6,000 bill in three years? (Do not round intermediate calculations and round your final answer to 2 decimal places.) PRESENT VALUE? How much would you have to deposit in the savings account each month 6 percent APR to be able to pay the bill? (Do not round intermediate calculations and round your final answer to 2 decimal places.) ANNUITY PAYMENT?

PFIN (with PFIN Online, 1 term (6 months) Printed Access Card) (New, Engaging Titles from 4LTR Press)

6th Edition

ISBN:9781337117005

Author:Randall Billingsley, Lawrence J. Gitman, Michael D. Joehnk

Publisher:Randall Billingsley, Lawrence J. Gitman, Michael D. Joehnk

Chapter7: Using Consumer Loans

Section: Chapter Questions

Problem 4FPE

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Q20 A local furniture store is advertising a deal in which you buy a $4,300 living room set with three years before you need to make any payments (no interest cost is incurred).How much money would you have to deposit now in a savings account earning 5 percent APR, compounded monthly, to pay the $4,300 bill in three years? (Do not round intermediate calculations and round your final answer to 2 decimal places.)PRESENT VALUE? How much would you have to deposit in the savings account each month 5 percent APR to be able to pay the bill? (Do not round intermediate calculations and round your final answer to 2 decimal places.)ANNUITY PAYMENT?
QUESTION 13 You are looking to buy a car. You can afford $610 in monthly payments for five years. In addition to the loan, you can make a $710 down payment. If interest rates are 9.00 percent APR, what price of car can you afford (loan plus down payment)? (Do not round intermediate calculations and round your final answer to 2 decimal places.) PRESENT VALUE
QUESTION 12 You are looking to buy a car. You can afford $400 in monthly payments for four years. In addition to the loan, you can make a $1,500 down payment. If interest rates are 8.25 percent APR, what price of car can you afford (loan plus down payment)? (Do not round intermediate calculations and round your final answer to 2 decimal places.) PRESENT VALUE?
Imagine you have a credit card balance of $1,000 that you would like to pay off within one year. The annual interest rate on that credit card is 16%, but interest compounds monthly, and you are required to make a payment each month. What amount would you have to pay monthly to pay off this balance within one year? Question options: a $90.71 b $80.66 c $83.33 d $99.12
Question 21 Suppose you want to buy a $147,000 home. You found a bank that offers a 30-year loan at 3.3% APR. What will be your monthly payment? (Round to the nearest cent.) How much would you end up paying the bank for the home after 30 years? (Round to the nearest cent.) $ Suppose you wanted to reduce the time of your loan to 25 years. What would be your new monthly payment? (Round to the nearest cent.) $ How much would you end up paying the bank for the home after 25 years? (Round to the nearest cent.) $ How much did you save by reducing the time of your mortgage loan? (Round to the nearest cent.) $
Q 19 A local furniture store is advertising a deal in which you buy a $2,200 dining room set and do not need to pay for two years (no interest cost is incurred).How much money would you have to deposit now in a savings account earning 5 percent APR, compounded monthly, to pay the $2,200 bill in two years? (Do not round intermediate calculations and round your final answer to 2 decimal places.) PRESENT VALUE? How much would you have to deposit in the savings account each month earning 5 percent APR to be able to pay the bill? (Do not round intermediate calculations and round your final answer to 2 decimal places.) ANNUITY PAYMENT?
QUESTION 5 You wish to have $4,000 in 2 years to purchase a new entertainment system. How much money (to the nearest dollar) should you deposit each quarter into an account paying 8% compounded quarterly? Summarize the information provided, stating the interest rate in a decimal form. PN = 4000 r = 0.08 N = 2 k = 4 Identify the formula you will to solve by writing the letter of the formula here: use A. A=P.(1+rt) В. P. = P.1+ rNk 1+ С. PN = D. P. -[1+ Solve the problem and give your answer here:
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QUESTION 3 Suppose you deposit $2.500 in a CD paying 8% interest, compounded every other month. How much will you have in the account after 15 years? Round your answer to the nearest cent. below is an example how to do problem mple 4 A certificate of deposit (CD) is a savings instrument that many banks offer. It usually gives a higher interest rate, but you cannot access your investment for a specified length of ime. Suppose you deposit $3000 in a CD paying 6% interest, compounded monthly. How much will you have in the accbunt after 20 years? In this example, Pa-$3000 1=0.06 -12 the initial deposit 6% annual rate 12 months in 1 year since we're looking for how much well have after 20 N=20 years 0.06 So P 3000 1+ 12 3D%2993061(round your answer to the nearest penny) %3D Let us compare the amount of money earned from compounding against the amount you would carn from simple interest Yars Simple Interest 6% compounded (S15 per month)monthly 0.5% each month 33900 $4800 $5700 $4046 55…