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Homework 2 solutions (1)

# Homework 2 solutions (1) - Homework#2 1 If I invest at an...

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Homework #2 1. If I invest \$3,750 today at an interest rate of 7.32% per year How much will I have in 41 years? \$67,910.74 Savings balance 2. I want to accumulate \$150,000 . If I invest \$2,600 today and the return is 11.19% per year when will I reach my goal (years)? 38.23 years 3 How much do I have to deposit today if I want to retire with \$2,000,000 47 years from today and I can earn a return of 9.32% per year? \$30,349.23 Required initial deposit 4. I plan to invest \$2,200 now with the hope of withdrawing \$4,500 in 84 months. What monthly rate of return is required? 0.86% Required monthly rate of return

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5. I purchase a BMW M3 for \$83,400 . If I receive a trade in allowance of \$11,500 for my old car, what will my payments be if my loan interest rate is 0.219% per month and loan term is 84 months? \$71,900 Amount financed \$938.03 Monthly Payment 6. In 5. above, when will the loan balance be reduced to \$18,000 if I increase my payment to \$1,400 per month? This is the correct answer 41.5 Months I will owe \$18,000 54.5 Months The loan balance reaches \$0 67.2 Months I will have overpaid my loan by \$18,000
7. I purchase a house today for \$127,500 with a 5% Down Pmt.

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