Question

40 years ago, Monica had a balance of $10,000 in her supply account. Today, after making annual contributions for 40 years, Monica has $1,000,000 in the same account. If the account earned annual interest of 8%, how much did she contribute to the account each year?

$3,021.56 $3,821.56 $2,797.74 $1,139.27

Linda is thinking of using Apple Pay to pay her rent, which is $2,100 a month due at the beginning of each month starting today. She is going to put a lump sum of money in a savings account today that will cover her rent for a year. If she earns an APR of 1.8% on the account, how much does she have to deposit into the account?

$24,993.44 $25,408.94 $25,447.06 $24,956.01 Bill took out a $65,000 student loan at the beginning of each school year for the past four years. Since they were student loans, Bill is not obligated to make any payments until now. He will begin making monthly payments in a month to pay back the loan in the next 15 years. The interest rate of the loan is 5%. How much is his monthly payment? $2,056.06 $2,215.47 $2,206.28 $2,316.59 $2,326.25 Walgreens has an 8% coupon bond that matures in 5 years. The bond pays interest semiannually. What is the market price of a $1,000 face-value bond if the yield to maturity is 7%? $1,041.00 $1,011.77 $1,041.58 $1,142.86 $1,053.23

Answer 1

1)	$       3,021.56
Working:
Annual contribution	=-pmt(rate,nper,pv,fv)
	$       3,021.56
Where,
rate	=	8%
nper	=	40
pv	=	$            -10,000
fv	=	$       10,00,000
2)		$       24,993.44
Working:
Present Value of rental payment	=pv(rate,nper,pmt,fv,1)		Where,
		$       24,993.44			rate	=	1.8%/12	=	0.0015
					nper	=	1*12	=	12
					pmt			=	$     -2,100.00
					fv			=	0
3)	$       2,326.25
Working:
Value of loan now	=-fv(rate,nper,pmt,pv,1)			Where,
	$ 2,94,166.03				rate			=	5%
					nper			=	4
					pmt			=	$     65,000.00
					pv			=	0
Monthly Payment	=-pmt(rate,nper,pv,fv)			Where,
	$       2,326.25				rate	5%/12		=	0.004166667
					nper	15*12		=	180
					pv			=	$ 2,94,166.03
					fv			=	0
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