Practice Exam

# b30years chowmuchinterestwilltheypayin3

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Unformatted text preview: _______________ P/Y = _______________ C/Y = _______________ 1 5) A family has a \$100,000, 30 year mortgage at 9.66% compounded monthly. What is the unpaid balance after a) 5 years? _____________________________ b) 30 years? ____________________________ c) How much interest will they pay in 30 years? _______________________ N = _______________ a) b) c) I% = _______________ PV = _______________ PMT = _______________ FV = _______________ P/Y = _______________ C/Y = _______________ 6) A company establishes a s sinking fund to upgrade a plant in 15 years at an estimated cost of \$2,500,000. a) How much should be invested each month into an account paying 8.25% compounded monthly? _____________________________________________ b) How much interest will the account earn in the 15 years? __________________ N = _______________ I% = _______________ b) PV = _______________ PMT = _______________ FV = _______________ P/Y = _______________ C/Y = _______________ 7) An individual deposits \$2,000 each year for 25 years into an IRA. When she retires immediately after the 25th deposit, the IRA is worth \$220,000. a) Find the interest rate earned by the IRA over the 25 year period leading up to retirement. ________________________________ b) Assume that the IRA continues to earn the interest rate found in part (a) . How long can the retiree withdraw \$30,000 per year? _____________________...
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