2. a. If you invest $100 every year for the next 20 years starting one year...

  

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2. a. If you invest $100 every year for the next 20 years starting one year from today and you earn interest of 10% per year, how much will you have at the end of the 20 years? b. How much must you invest each year if you want to have $50,000 at the end of the 20 years? 4. You want to establish a "wasting" fund, which will provide you with $1,000 per year for four years, at which time the fund will be exhausted. How much must you put in the fund now if you can earn 10% interest per year? 5. You take a one-year installment loan of $1,000 at an interest rate of 12% per year (1% per month) to be repaid in 12 equal monthly payments. a. What is the monthly payment? b. What is the total amount of interest paid over the 12-month term of the loan? 2. a. If you invest $100 every year for the next 20 years starting one year from today and you earn interest of 10% per year, how much will you have at the end of the 20 years? b. How much must you invest each year if you want to have $50,000 at the end of the 20 years? 4. You want to establish a "wasting" fund, which will provide you with $1,000 per year for four years, at which time the fund will be exhausted. How much must you put in the fund now if you can earn 10% interest per year? 5. You take a one-year installment loan of $1,000 at an interest rate of 12% per year (1% per month) to be repaid in 12 equal monthly payments. a. What is the monthly payment? b. What is the total amount of interest paid over the 12-month term of the loan?

Answer rating: 100% (QA)

SOLUTION 2a To calculate the future value of the investment we can use the formula for the future va... View the full answer