In: Finance
What’s the future value of the initial $100 deposit after 10 years? We assume current interest rate is = 6%, compounded monthly.
a. $121.0
b. $161.6
c. $181.9
d. $223.4
You want to receive $5,800 per month in retirement. If you can earn 0.8% return per month and you expect to need the income for 30 years, how much do you need to have in your account at retirement?
$585,123 |
||
$599,513 |
||
$626,783 |
||
$683,833 |
FV= PV*(1+r)^n |
Where, |
FV= Future Value |
PV = Present Value |
r = Interest rate =6%/12 =0.5% |
n= periods in number =10*12 =120 |
= $100*( 1+0.005)^120 |
=100*1.8194 |
= $181.94 Correct Option =c. $181.9 |
2)
Present Value Of An Annuity |
= C*[1-(1+i)^-n]/i] |
Where, |
C= Cash Flow per period |
i = interest rate per period =0.8% |
n=number of period =30*12 =360 |
= $5800[ 1-(1+0.008)^-360 /0.008] |
= $5800[ 1-(1.008)^-360 /0.008] |
= $5800[ (0.9432) ] /0.008 |
= $6,83,833.26 |