After living in a university residence for one year, Mary-Beth decides to rent an apartment for the remaining three years of her degree. She has found a nice location that will cost $450 per month. Rent for the first and last month must be paid up front. How much money would Mary-Beth need to have in her bank account right now to be sure she will always have enough for rent? The bank account pays 3.75 percent interest, compounded monthly.
Answer to relevant QuestionsA 65-year-old man intends to use his retirement funds to purchase an annuity from a life insurance company. Given the amount of money the man has available to invest, the insurance company is able to offer two alternatives. ...Bank A pays 7.25 percent interest compounded semi-annually, Bank B pays 7.20 percent compounded quarterly, and Bank C pays 7.15 percent compounded monthly. Which bank pays the highest effective annual rate?At the age of 10, Felix decided that he wanted to attend a very prestigious (and expensive) university. How much will his parents have to save each year to accumulate $40,000 by the time Felix needs the funds in eight years? ...Michelle is offered a loan of $29,000 that requires 60 monthly payments of $588.02. What is the effective annual interest rate on this loan? What would the quoted rate be?a. Determine the month-end payment for a $200,000, 10-year loan with an interest rate of 12 percent, compounded monthly, assuming there is no down payment.b. Calculate the outstanding loan amount after 18 months.c. Redo part ...
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