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1)Brock Lee decided to sell his stock due to the recent market turbulence and instead put the entire amount of $100,000 into a savings account that
1)Brock Lee decided to sell his stock due to the recent market turbulence and instead put the entire amount of $100,000 into a savings account that promises to pay him annual compound interest of 4% ( Show all work and TVM Formulas )
a) How much money will Mr. Lee accrue if he leaves it all in the bank for 1, 8, 20 years?
b) If Mr.Lee finds a different investment opportunity that promises to pay him 10% per year, rework part(a) using this new interest rate
2) If Ginger Rayle was offered $40,000 five years from now in return for an investment of $1,000 currently, what annual rate of interest would she earn if she too the offer( Show all work and TVM Formulas )
3) When you graduate your decide to buy a car, the car you want to buy costs $25,000 and you have enough to put 20% down in cash. you can take out a loan for the rest of the cost of the car. Calculate your monthly car payments assuming the auto finance department states that the annual interest rate on the car loan is 8% and you pay the loan over 3 year period (Hint: make sure everything is in months when solving for the payment ).( Show all work and TVM Formulas )
4) When you retire you want to be able to withdrawal $10,000 the first year of retirement with the intention of withdrawing 5% more every year thereafter for a total of 20 years. How much do you need to have at retirement in order for this plan to work? Assume the interest rate during this time period is 8%. ( Show all work and TVM Formulas )
