What must he save per month to achieve this goal

Assignment Help Financial Management

Reference no: EM13868492

1. Bob would like to have $26,000 in 5 years to use as a down payment on a house. He plans on depositing an equal of money at the end of every month to save for this goal. If Bob can earn 6% interest per year(0.5% interest per month) what must he save per month to achieve this goal?

2. Sue has $24,000 to use as a down payment on a house and can afford to pay $800 per month for a mortgage. If the interest rate on a 15 year mortgage is 4.5% (this is an APR). What is the highest price house she can afford using a 15 year mortgage?

3. Larry would like to retire in 30 years. He estimates that he would need $2.1 million in order to retire. He is planning on depositing $1800 per month into his retirement account. What nominal interest rate would he need to earn in order to achieve his goal?

Reference no: EM13868492

Questions Cloud

Receivables investment : McDowell Industries sells on terms of 3/10, net 25. Total sales for the year are $1,086,500; 40% of the customers pay on the 10th day and take discounts, while the other 60% pay, on average, 62 days after their purchases. What is the days' sales outs..

About the cash conversion cycle : Primrose Corp has $16 million of sales, $1 million of inventories, $2 million of receivables, and $2 million of payables. Its cost of goods sold is 75% of sales, and it finances working capital with bank loans at an 7% rate. How much cash would be fr..

Capital rationing investment funds constraint : Describe how the profitability index approach may be used by a firm faced with a capital rationing investment funds constraint.

Calculate component weights of capital : As a consultant to GBH Skiwear, you have been asked to compute the appropriate discount rate to use in the evaluation of the purchase of a new warehouse facility. Calculate component weights of capital. The weight of debt in the firm’s capital struct..

What must he save per month to achieve this goal : Bob would like to have $26,000 in 5 years to use as a down payment on a house. He plans on depositing an equal of money at the end of every month to save for this goal. If Bob can earn 6% interest per year(0.5% interest per month) what must he save p..

Compute the cost of capital for the firm : Compute the cost of capital for the firm for the following: A bond that has a $1,000 par value (face value) and a contract or coupon interest rate of 11.9 percent. Interest payments are $59.50 and are paid semiannually. The bonds have a current marke..

Earnings before interest and taxes and net income decrease : (leverage and EPS) You have developed the following pro forma income statement for your corporation: If sales should increase by 25 percent, by what percent would earnings before interest and taxes and net income increase. If sales decrease by 25 per..

About the lockbox system : Hardin-Gehr Corporation (HGC) began operations 5 years ago as a small firm serving customers in the Detroit area. However, its reputation and market area grew quickly. Today HGC has customers all over the United States. hat is the maximum monthly cha..

Consider an annual coupon bond with face value : Consider an annual coupon bond with a face value of $100, 12 years to maturity, and a price of $95. The coupon rate on the bond is 4%. If you can reinvest coupons at rate of 2% per annum, then how much money do you have if you hold the bond to maturi..

User Account

All Pages