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How much money do you need to put in the bank today

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  1. If you take out a $300,000, 30 -year mortgage with an annual interest rate of 5.25%, what will be your monthly payment? If the interest rate goes down to 5%, what will be your monthly payments?
  2. If your monthly rent is $850 per month payable on the first day of the month, what is the present value of your rent for this year, assuming today is the New Year's day and the interest rate is 5%?
  3. Suppose you will need to have $15,000 in the bank three years from today. Your local bank offers a three-year CD that pays 2.5% per year with semi-annual compounding.
  4. How much money do you need to put in the bank today so that you can have $15,000 in three years?
  5. You need a new car and you want to pay off the loan in three years. Your budgeted monthly payment is $300. Will a car loan of $30,000 break your budget, assuming 5% annual interest? Please show your calculations.

 

Reference no: EM13265371

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