Lecture Notes Oct 0509 Part 2

# Lecture Notes Oct 0509 Part 2 - compounded semi-annually,...

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Extra Extra Calculator Problems Bob wants to buy a new Harley. The cost is \$60,000. Bob will put 10% and pay the rest in 3 equal annual payments which include interest at 8%. How much are the payments? 2 nd CLR TVM .10 X 60,000 = 6,000 - + 60,000 = 54,000 = PV 3 N 8 I/Y CPT PMT -20,95381 Amortize the loan 60,000.00 6,000.00 6,000.00 54,000.00 1 20,953.81 4,320.00 16,633.81 37,366.19 2 20,953.81 2,989.30 17,964.51 19,401.68 3 20,953.81 1,552.13 19,401.68 (0.00) If Bob made 60 monthly payments (deal still the same, 10% down and 8% interest), what would be the amount of the each payment? 2 nd CLR TVM .10 X 60,000 = 6,000 - + 60,000 = 54,000 = PV 60 N 8/12 = I/Y CPT PMT -1,094.93 Still on monthly payments, what would be the interest expense for the second month? 60,000.00 6,000.00 6,000.00 54,000.00 1 1,094.93 360.00 734.93 53,265.07 2 1,094.93 355.10 739.83 52,525.24 Suzie wants to have \$10,000,000 in the bank in thirty years. If the bank pays interest at 8%

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Unformatted text preview: compounded semi-annually, how much does she need to deposit today to reach her goal? 2 nd CLR TVM 10,000,000 FV 8/2 = I/Y 60 N CPT PV -950,604.01 Cindy wants to withdraw \$10,000 per month for the next 5 years. She will withdraw her first amount in one month. The bank pays interest at 12% compounded monthly. How much does she need to deposit today to do this? 2 nd CLR TVM 10,000 PMT 12/12 = I/Y 5 x 12 = N CPT PV -449,550.38 Chris hit the lottery!! She has the option of taking \$520,000 today or \$90,000 per year for the next 8 years, or \$85,000 per year for the next nine years or \$1,000,000 in ten years. If she can deposit her money at 6%, ignoring taxes, which deal should she take? Deal 1 520,000 Deal 2 2 nd CLR TVM 90,000 PMT 8 N 6 I/Y CPT PV 558,881.44 Deal 3 2 nd CLR TVM 85,000 PMT 9 N 6 I/Y CPT PV 578,143.84 Deal 4 2 nd CLR TVM 10 N 6 I/Y 1,000,000 FV CPT PV 558,394.78...
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## Lecture Notes Oct 0509 Part 2 - compounded semi-annually,...

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