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Alinara [238K]
4 years ago
8

Today is date 0. In 10 years, you plan to retire and buy a house in Norman, OK. In terms of a time line, you will retire at the

end of year 10. The house you are looking at currently costs $200,000 and is expected to increase in value each year at a rate of 5% compounded annually. Assuming you can earn 10% annually on any investment you might make, how much must you invest at the end of each of the next 10 years to be able to buy your dream home when you retire?
Business
1 answer:
Marianna [84]4 years ago
6 0

Answer:

$20,441.67

Explanation:

the present value of your house is $200,000, its future value = $200,000 x (1 + 5%)¹⁰ = $325,778.93

you can earn a 10% annual interest rate for 10 years, that means that we can use a future value of an annuity factor = 15.937

your annual investment = future value of the house / annuity factor = $325,778.93 / 15.937 = $20,441.67

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There are seven basic values based on which each of them are defined and the dimension that allow the people to keep their private lives and their work life different is called as specific oriented culture

The other dimensions also includes the difference between the national cultures and they developed the model in each cultures and they can help the people to understand the basic differences

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"in which type of operations are you likely to see, at most, only minor variations in the product or service being produced usin
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Which of the following is a feature of a credit card?
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I think it is C or B or A
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The Sarbanes-Oxley Act of 2002 was enacted in response to corporate scandals that largely centered on the quality of corporate f
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Audit committee.

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7 0
4 years ago
You are buying a home for $360,000. If you make a down payment of $60,000 and take out a mortgage on the rest at 8.5% compounded
MatroZZZ [7]

Answer:

$2954.22

Explanation:

We are given a present value of $360000 which needs to be paid in the future for the mortgage of a house therefore we are further told that $60000 of down payment has been made so now we are required to pay $300000 as monthly installments for the next 15 years so this is a present value annuity problem as we will have future regular periodic payments that for a house mortgage so firstly to interpret this information properly we will use the present value annuity to find the monthly payments which the formula is as follows:

Pv = Cx[(1 -(1+i)^-n)/i]  

where C is the periodic payment we are looking for.

Pv is the present value for the home which is $300000 as a down payment of $60000 was made.

i is the interest rate which is 8.5%/12 as we are told it is compounded monthly.

n is the number of periods the in which the mortgage payments are made which is 15 years X 12 months =180 payments.

now we will substitute in the above mentioned formula :

$300000 = Cx[(1-(1+8.5%/12)^-180)/(8.5%/12)] now we will divide both sides with what multiplies C in brackets to solve for C

$300000/[(1-(1+8.5%/12)^-180)/(8.5%/12)] = C

$2954.218674 = C now we round off to two decimal places

C= $2954.22 which will be the monthly payment for this mortgage for 15 years every month.

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