How would I solve question 42 in excel?

How would I solve question 42 in excel?

Chapter 4 The Time Value of Money 34. You have just entered an MBA program and have decided to pay for your living expenses using a credit card that has no minimum monthly payment. You intend to charge $1000 per month on the card for the next 21 months. The card carries a monthly interest rate of 19%. How much money will you owe on the card 22 months from now, when you receive your first statement post-graduation? *35. Your credit card charges an interest rate of 2% per month. You have a current balance of $1000, and want to pay it off. Suppose you can afford to pay off $100 per month. What will your bal- ance be at the end of one year? Solving for the Cash Payments 36. You have decided to buy a perpetuity. The bond makes one payment at the end of every year forever and has an interest rate of 5 % . If you initially put $1000 into the bond, what is the pay ment every year? 37.. You are thinking of purchasing a house. The house costs $350,000. You have $50,000 in cash that you can use as a down payment on the house, but you need to borrow the rest of the purchase price. The bank is offering a 30-year mortgage that requires annual payments and has an interest rate of 7% per year. What will your annual payment be if you sign up for this mortgage? *38. You would like to buy the house and take the mortgage described in Problem 37. You can afford to pay only $23,500 per year. The bank agrees to allow you to pay this amount each year, yet still borrow $300,000. At the end of the mortgage (in 30 years), you must make a balloon payment; that is, you must repay the remaining balance on the mortgage. How much will this balloon payment be? 39. You have just made an offer on a new home and are seeking a mortgage. You need to borrow $600,000. a. The bank offers a 30-year mortgage with fixed monthly payments and an interest rate of 0.5% per month. What is the amount of your monthly payment if you take this loan? b. Alternatively, you can get a 15-year mortgage with fixed monthly payments and an interest rate of 0.4% per month. How much would your monthly payments be if you take this loan instead? 40. Suppose you take the 30-year mortgage described in Problem 39, part (a). How much will you still owe on the mortgage after 15 years? 41. You are thinking about buying a pice of art that costs $50,000. The art dealer is proposing the following deal: He will lend you the money, and you will repay the loan by making the same payment every two years for the next 20 years (i.e., a total of 10 payments). If the interest rate is 4% per year, how much will you have to pay every two years? 42. You are saving for retirement. To live comfortably, you decide you will need to save $2 million by the time you are 65. Today is your 30th birthday, and you decide, starting today and con- tinuing on every birthday up to and including your 65th birthday, that you will put the same amount into a savings account. year to make sure that you will have $2 million in the account on your 65th birthday? the interest rate is 5 %, how much must you set aside each 43. You realize that the plan in Problem 42 has a flaw. Because your income will increase over your lifetime, it would be more realistic to save less now and more later. Instead of putting the same 1Hlel Hle 14la 1Hlk