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compounded monthly for any deposits made in the next month. If they deposit $10,000, then how much will be in the account in 18 years?

compounded monthly for any deposits made in the next month. If they deposit $10,000, then how much will be in the account in 18 years?

Essentials Of Investments
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Nk -Nk (1+ E)' [1- (1+E) (E) Nk A = P,(1+ rt) PN = P. (1+)* PN =d Po = d 1. Jefferson and Rio Morales are trying to decide on an account to help save for college for their newborn son Miles. Forest Hills Bank is offering a college savings account that has a promotional 4% interest compounded monthly for any deposits made in the next month. If they deposit $10,000, then how much will be in the account in 18 years? 2. Miles' uncle Aaron Davis (Jefferson's brother) is out on the prowl one night and sees an ad for another bank offering a special college savings account, which he tells Jefferson and Rio about. If you commit to deposits of $80 a month for 18 years, then they are offering a guaranteed rate of 4.5% interest compounded monthly. How much would they have at the end of 18 years with this account? Is this a better option? Why or why not?
Transcribed Image Text:Nk -Nk (1+ E)' [1- (1+E) (E) Nk A = P,(1+ rt) PN = P. (1+)* PN =d Po = d 1. Jefferson and Rio Morales are trying to decide on an account to help save for college for their newborn son Miles. Forest Hills Bank is offering a college savings account that has a promotional 4% interest compounded monthly for any deposits made in the next month. If they deposit $10,000, then how much will be in the account in 18 years? 2. Miles' uncle Aaron Davis (Jefferson's brother) is out on the prowl one night and sees an ad for another bank offering a special college savings account, which he tells Jefferson and Rio about. If you commit to deposits of $80 a month for 18 years, then they are offering a guaranteed rate of 4.5% interest compounded monthly. How much would they have at the end of 18 years with this account? Is this a better option? Why or why not?
3. Peter Parker and MJ decide to buy a one-bedroom condo in Manhattan. Determine the monthly payment on a loan for $750,000 (assume this is after a down payment) if the interest rate is 4% with a term of 30 years. 4. Spider-Man decides that (for some reason) he needs a new Spider-Mobile (yes, this was actually a thing, look it up!), and he decides that he can afford to pay at most $400 a month. The dealership's loan company is offering him a 5-year payment plan compounded/paid monthly, with an annual interest rate of 3.4%. What is the most expensive car Spidey can afford, assuming no down payment? That is, give the maximum loan balance that he could afford at $400 a month.
Transcribed Image Text:3. Peter Parker and MJ decide to buy a one-bedroom condo in Manhattan. Determine the monthly payment on a loan for $750,000 (assume this is after a down payment) if the interest rate is 4% with a term of 30 years. 4. Spider-Man decides that (for some reason) he needs a new Spider-Mobile (yes, this was actually a thing, look it up!), and he decides that he can afford to pay at most $400 a month. The dealership's loan company is offering him a 5-year payment plan compounded/paid monthly, with an annual interest rate of 3.4%. What is the most expensive car Spidey can afford, assuming no down payment? That is, give the maximum loan balance that he could afford at $400 a month.
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