This essay FIN 419 Week 3 Problems has a total of 332 words and 3 pages.
Problem 1-A $85,000.00
Future Value: $873,260.59 9% FV
30 $873,260.59 PV(D2,D3,D1)
Years: 35 Future Value: $42,777.60 PV(B4,B6,0,B2,0)
Present Value $85,000.00
Years: 30 Future Value: $738,972.37 PV(B10,B12,B8)
If rates were to raise the amounts needed for the 35 year period prior to retiring would lower.
Increasing the interest rate increases the future value of the investment causing a lesser amount to be required.
Year Amount Presnt Value Factor Present Value
1 $7,000.00 0.934579439 1/(1+A19)^B24 $6,542.06 B19*D19
2 $4,000.00 0.925979799 1/(1+A20)^B24 $3,703.92 B20*D20
3 $8,000.00 0.907519155 1/(1+A21)^B24 $7,260.15 B21*D21
4 $10,000.00 0.893453799 1/(1+A22)^B24 $8,934.54 B22*D22
5 $13,000.00 0.882123542 1/(1+A23)^B24 $11,467.61 B23*D23
Rate 7% Total (Answer) $37,908.27
When the earning rate increases the total amount decreases. As the rate increases so does the interest earned toward the investment.
The larger your rate is the lower your present value will need to be to cover your future value shortfall
Amount: $(25,000.00) $10,768.29 PMT(B31,B32,B30) End of Year Loan Payment
Annual Interest: 14% Answer
Please see attached excel spreadsheet for Loan Amortization Schedule
As the principal amount is paid onto a loan the interest amount decreases.
This is because interest is determined based on present balance.
To start we are putting $500 down on a $6,500 loan, which leaves $6,000
Annual Rate: 14%
Years: 2 Answer
Payments: 24 Monthly Payment: $288.08 PMT(B43/12,B45,B42)
Total: $6,913.86 E45*B45
Again, to start we are putting $500 down on a $6,500 loan, which leaves $6,000
Annual Rate: 9%
Years: 2 Answer
Payments: 24 Monthly Payment: $274.11 PMT(B49/12,B45,B48)
Total $6,578.60 E52*B52
Topics Related to FIN 419 Week 3 Problems
Mathematical finance, Loans, Mortgage, Debt, Interest, Renting, Present value, Amortization schedule, Future value, Amortization, Time value of money
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