1) A.Starting today, Nina is planning to invest at the beginning of each year for 6...

A.Starting today, Nina is planning to invest at the beginning of each year for 6 years. Nina will earn is an annual 6.50%return on her investment. How much money would the investment be worth in today’s dollars?

B. Nina is looking for a sofa for $7800 and the credit terms are 3 years at an annual interest rate of 6.8%. If you purchase the sofa on credit and make each payment every month, how much will you have to pay each term?

Inflation isn't told in these problems

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Expert Solution

A. Starting today, Nina is planning to invest at the beginning of each year for 6 years. Nina will earn is an annual 6.50%return on her investment. How much money would the investment be worth in today’s dollars?

Let's say Nina invests $200 every year

Present value of an annuity due

The investment is worth $1,031.1358876246 in today's dollars.

B. Nina is looking for a sofa for $7800 and the credit terms are 3 years at an annual interest rate of 6.8%. If you

purchase the sofa on credit and make each payment every month, how much will you have to pay each term?

Monthly interest rate, r = 0.068/12 = 0.005666666667

Number of monthly payments, n = 3 * 12 = 36

Nina will have to pay $240.1287402245 each term

jeff jeffy answered 1 year ago

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