What will be the monthly loan payment

Reference no: EM132225924

FUTURE VALUE OF AN ANNUITY

Your client is 26 years old. She wants to begin saving for retirement, with the first payment to come one year from now. She can save $12,000 per year, and you advise her to invest it in the stock market, which you expect to provide an average return of 9% in the future.

a. If she follows your advice, how much money will she have at 65? Round your answer to the nearest cent.

b. How much will she have at 70? Round your answer to the nearest cent.

c. She expects to live for 20 years if she retires at 65 and for 15 years if she retires at 70. If her investments continue to earn the same rate, how much will she be able to withdraw at the end of each year after retirement at each retirement age? Round your answers to the nearest cent.

Annual withdrawals if she retires at 65: $
Annual withdrawals if she retires at 70: $

You want to buy a car, and a local bank will lend you $15,000. The loan will be fully amortized over 5 years (60 months), and the nominal interest rate will be 12% with interest paid monthly.

a. What will be the monthly loan payment? Do not round intermediate steps. Round your answer to the nearest cent.

b. What will be the loan's EAR? Do not round intermediate steps. Round your answer to two decimal places.

Reference no: EM132225924

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