What is the most expensive car you can afford

Reference no: EM132302801

Assignment - Solve the following Questions. You must show all your work for full credit.

Q1. FINDING THE REQUIRED INTEREST RATE - Your parents will retire in 19 years. They currently have $350,000 saved, and they think they will need $800,000 at retirement. What annual interest rate must they earn to reach their goal, assuming they don't save any additional funds?

Q2. TIME TO REACH A FINANCIAL GOAL - You have $33,556.25 in a brokerage account, and you plan to deposit an additional $5,000 at the end of every future year until your account totals $220,000. You expect to earn 12% annually on the account. How many years will it take to reach your goal?

Q3. An investment will pay $150 at the end of each of the next 3 years, $250 at the end of Year 4, $300 at the end of Year 5, and $500 at the end of Year 6. If other investments of equal risk earn 11% annually, what is its present value? Its future value?

Q4. You borrow $230,000; the annual loan payments are $20,430.31 for 30 years. What interest rate are being charged?

Q5. You have saved $4000 for a down payment on a new car. The largest monthly payment you can afford is $350. The loan will have a 12% APR based on end-of-months payments. What is the most expensive car you can afford if you finance it for 48 months? For 60 months?

Reference no: EM132302801

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