{"id":16083,"date":"2021-04-01T23:57:02","date_gmt":"2021-04-01T23:57:02","guid":{"rendered":"https:\/\/courses.lumenlearning.com\/nwfsc-MGF1107\/chapter\/assignment-finance-problem-set\/"},"modified":"2021-07-06T03:04:09","modified_gmt":"2021-07-06T03:04:09","slug":"assignment-finance-problem-set","status":"publish","type":"chapter","link":"https:\/\/courses.lumenlearning.com\/nwfsc-MGF1107\/chapter\/assignment-finance-problem-set\/","title":{"raw":"Module 6 Problem Set","rendered":"Module 6 Problem Set"},"content":{"raw":"

Skills<\/h2>\r\n
    \r\n \t
  1. A friend lends you $200 for a week, which you agree to repay with 5% one-time interest. How much will you have to repay?<\/li>\r\n \t
  2. Suppose you obtain a $3,000 T-note with a 3% annual rate, paid quarterly, with maturity in 5 years. How much interest will you earn?<\/li>\r\n \t
  3. A T-bill is a type of bond that is sold at a discount over the face value. For example, suppose you buy a 13-week T-bill with a face value of $10,000 for $9,800. This means that in 13 weeks, the government will give you the face value, earning you $200. What annual interest rate have you earned?<\/li>\r\n \t
  4. Suppose you are looking to buy a $5000 face value 26-week T-bill. If you want to earn at least 1% annual interest, what is the most you should pay for the T-bill?<\/li>\r\n \t
  5. You deposit $300 in an account earning 5% interest compounded annually. How much will you have in the account in 10 years?<\/li>\r\n \t
  6. How much will $1000 deposited in an account earning 7% interest compounded annually be worth in 20 years?<\/li>\r\n \t
  7. You deposit $2000 in an account earning 3% interest compounded monthly.\r\n
      \r\n \t
    1. How much will you have in the account in 20 years?<\/li>\r\n \t
    2. How much interest will you earn?<\/li>\r\n<\/ol>\r\n<\/li>\r\n \t
    3. You deposit $10,000 in an account earning 4% interest compounded monthly.\r\n
        \r\n \t
      1. How much will you have in the account in 25 years?<\/li>\r\n \t
      2. How much interest will you earn?<\/li>\r\n<\/ol>\r\n<\/li>\r\n \t
      3. How much would you need to deposit in an account now in order to have $6,000 in the account in 8 years? Assume the account earns 6% interest compounded monthly.<\/li>\r\n \t
      4. How much would you need to deposit in an account now in order to have $20,000 in the account in 4 years? Assume the account earns 5% interest.<\/li>\r\n \t
      5. You deposit $200 each month into an account earning 3% interest compounded monthly.\r\n
          \r\n \t
        1. How much will you have in the account in 30 years?<\/li>\r\n \t
        2. How much total money will you put into the account?<\/li>\r\n \t
        3. How much total interest will you earn?<\/li>\r\n<\/ol>\r\n<\/li>\r\n \t
        4. You deposit $1000 each year into an account earning 8% compounded annually.\r\n
            \r\n \t
          1. How much will you have in the account in 10 years?<\/li>\r\n \t
          2. How much total money will you put into the account?<\/li>\r\n \t
          3. How much total interest will you earn?<\/li>\r\n<\/ol>\r\n<\/li>\r\n \t
          4. Jose has determined he needs to have $800,000 for retirement in 30 years.\u00a0\u00a0 His account earns 6% interest.\r\n
              \r\n \t
            1. How much would you need to deposit in the account each month?<\/li>\r\n \t
            2. How much total money will you put into the account?<\/li>\r\n \t
            3. How much total interest will you earn?<\/li>\r\n<\/ol>\r\n<\/li>\r\n \t
            4. You wish to have $3000 in 2 years to buy a fancy new stereo system. How much should you deposit each quarter into an account paying 8% compounded quarterly?<\/li>\r\n \t
            5. You want to be able to withdraw $30,000 each year for 25 years. Your account earns 8% interest.\r\n
                \r\n \t
              1. How much do you need in your account at the beginning<\/li>\r\n \t
              2. How much total money will you pull out of the account?<\/li>\r\n \t
              3. How much of that money is interest?<\/li>\r\n<\/ol>\r\n<\/li>\r\n \t
              4. How much money will I need to have at retirement so I can withdraw $60,000 a year for 20 years from an account earning 8% compounded annually?\r\n
                  \r\n \t
                1. How much do you need in your account at the beginning?<\/li>\r\n \t
                2. How much total money will you pull out of the account?<\/li>\r\n \t
                3. How much of that money is interest?<\/li>\r\n<\/ol>\r\n<\/li>\r\n \t
                4. You have $500,000 saved for retirement. Your account earns 6% interest. How much will you be able to pull out each month, if you want to be able to take withdrawals for 20 years?<\/li>\r\n \t
                5. Loren already knows that he will have $500,000 when he retires. If he sets up a payout annuity for 30 years in an account paying 10% interest, how much could the annuity provide each month?<\/li>\r\n \t
                6. You can afford a $700 per month mortgage payment. You\u2019ve found a 30 year loan at 5% interest.\r\n
                    \r\n \t
                  1. How big of a loan can you afford?<\/li>\r\n \t
                  2. How much total money will you pay the loan company?<\/li>\r\n \t
                  3. How much of that money is interest?<\/li>\r\n<\/ol>\r\n<\/li>\r\n \t
                  4. Marie can afford a $250 per month car payment. She\u2019s found a 5 year loan at 7% interest.\r\n
                      \r\n \t
                    1. How expensive of a car can she afford?<\/li>\r\n \t
                    2. How much total money will she pay the loan company?<\/li>\r\n \t
                    3. How much of that money is interest?<\/li>\r\n<\/ol>\r\n<\/li>\r\n \t
                    4. You want to buy a $25,000 car. The company is offering a 2% interest rate for 48 months (4 years). What will your monthly payments be?<\/li>\r\n \t
                    5. You decide to finance a $12,000 car at 3% compounded monthly for 4 years. What will your monthly payments be? How much interest will you pay over the life of the loan?<\/li>\r\n \t
                    6. You want to buy a $200,000 home. You plan to pay 10% as a down payment, and take out a 30 year loan for the rest.\r\n
                        \r\n \t
                      1. How much is the loan amount going to be?<\/li>\r\n \t
                      2. What will your monthly payments be if the interest rate is 5%?<\/li>\r\n \t
                      3. What will your monthly payments be if the interest rate is 6%?<\/li>\r\n<\/ol>\r\n<\/li>\r\n \t
                      4. Lynn bought a $300,000 house, paying 10% down, and financing the rest at 6% interest for 30 years.\r\n
                          \r\n \t
                        1. Find her monthly payments.<\/li>\r\n \t
                        2. How much interest will she pay over the life of the loan?<\/li>\r\n<\/ol>\r\n<\/li>\r\n \t
                        3. Emile bought a car for $24,000 three years ago. The loan had a 5 year term at 3% interest rate. How much does he still owe on the car?<\/li>\r\n \t
                        4. A friend bought a house 15 years ago, taking out a $120,000 mortgage at 6% for 30 years. How much does she still owe on the mortgage?<\/li>\r\n<\/ol>","rendered":"

                          Skills<\/h2>\n
                            \n
                          1. A friend lends you $200 for a week, which you agree to repay with 5% one-time interest. How much will you have to repay?<\/li>\n
                          2. Suppose you obtain a $3,000 T-note with a 3% annual rate, paid quarterly, with maturity in 5 years. How much interest will you earn?<\/li>\n
                          3. A T-bill is a type of bond that is sold at a discount over the face value. For example, suppose you buy a 13-week T-bill with a face value of $10,000 for $9,800. This means that in 13 weeks, the government will give you the face value, earning you $200. What annual interest rate have you earned?<\/li>\n
                          4. Suppose you are looking to buy a $5000 face value 26-week T-bill. If you want to earn at least 1% annual interest, what is the most you should pay for the T-bill?<\/li>\n
                          5. You deposit $300 in an account earning 5% interest compounded annually. How much will you have in the account in 10 years?<\/li>\n
                          6. How much will $1000 deposited in an account earning 7% interest compounded annually be worth in 20 years?<\/li>\n
                          7. You deposit $2000 in an account earning 3% interest compounded monthly.\n
                              \n
                            1. How much will you have in the account in 20 years?<\/li>\n
                            2. How much interest will you earn?<\/li>\n<\/ol>\n<\/li>\n
                            3. You deposit $10,000 in an account earning 4% interest compounded monthly.\n
                                \n
                              1. How much will you have in the account in 25 years?<\/li>\n
                              2. How much interest will you earn?<\/li>\n<\/ol>\n<\/li>\n
                              3. How much would you need to deposit in an account now in order to have $6,000 in the account in 8 years? Assume the account earns 6% interest compounded monthly.<\/li>\n
                              4. How much would you need to deposit in an account now in order to have $20,000 in the account in 4 years? Assume the account earns 5% interest.<\/li>\n
                              5. You deposit $200 each month into an account earning 3% interest compounded monthly.\n
                                  \n
                                1. How much will you have in the account in 30 years?<\/li>\n
                                2. How much total money will you put into the account?<\/li>\n
                                3. How much total interest will you earn?<\/li>\n<\/ol>\n<\/li>\n
                                4. You deposit $1000 each year into an account earning 8% compounded annually.\n
                                    \n
                                  1. How much will you have in the account in 10 years?<\/li>\n
                                  2. How much total money will you put into the account?<\/li>\n
                                  3. How much total interest will you earn?<\/li>\n<\/ol>\n<\/li>\n
                                  4. Jose has determined he needs to have $800,000 for retirement in 30 years.\u00a0\u00a0 His account earns 6% interest.\n
                                      \n
                                    1. How much would you need to deposit in the account each month?<\/li>\n
                                    2. How much total money will you put into the account?<\/li>\n
                                    3. How much total interest will you earn?<\/li>\n<\/ol>\n<\/li>\n
                                    4. You wish to have $3000 in 2 years to buy a fancy new stereo system. How much should you deposit each quarter into an account paying 8% compounded quarterly?<\/li>\n
                                    5. You want to be able to withdraw $30,000 each year for 25 years. Your account earns 8% interest.\n
                                        \n
                                      1. How much do you need in your account at the beginning<\/li>\n
                                      2. How much total money will you pull out of the account?<\/li>\n
                                      3. How much of that money is interest?<\/li>\n<\/ol>\n<\/li>\n
                                      4. How much money will I need to have at retirement so I can withdraw $60,000 a year for 20 years from an account earning 8% compounded annually?\n
                                          \n
                                        1. How much do you need in your account at the beginning?<\/li>\n
                                        2. How much total money will you pull out of the account?<\/li>\n
                                        3. How much of that money is interest?<\/li>\n<\/ol>\n<\/li>\n
                                        4. You have $500,000 saved for retirement. Your account earns 6% interest. How much will you be able to pull out each month, if you want to be able to take withdrawals for 20 years?<\/li>\n
                                        5. Loren already knows that he will have $500,000 when he retires. If he sets up a payout annuity for 30 years in an account paying 10% interest, how much could the annuity provide each month?<\/li>\n
                                        6. You can afford a $700 per month mortgage payment. You\u2019ve found a 30 year loan at 5% interest.\n
                                            \n
                                          1. How big of a loan can you afford?<\/li>\n
                                          2. How much total money will you pay the loan company?<\/li>\n
                                          3. How much of that money is interest?<\/li>\n<\/ol>\n<\/li>\n
                                          4. Marie can afford a $250 per month car payment. She\u2019s found a 5 year loan at 7% interest.\n
                                              \n
                                            1. How expensive of a car can she afford?<\/li>\n
                                            2. How much total money will she pay the loan company?<\/li>\n
                                            3. How much of that money is interest?<\/li>\n<\/ol>\n<\/li>\n
                                            4. You want to buy a $25,000 car. The company is offering a 2% interest rate for 48 months (4 years). What will your monthly payments be?<\/li>\n
                                            5. You decide to finance a $12,000 car at 3% compounded monthly for 4 years. What will your monthly payments be? How much interest will you pay over the life of the loan?<\/li>\n
                                            6. You want to buy a $200,000 home. You plan to pay 10% as a down payment, and take out a 30 year loan for the rest.\n
                                                \n
                                              1. How much is the loan amount going to be?<\/li>\n
                                              2. What will your monthly payments be if the interest rate is 5%?<\/li>\n
                                              3. What will your monthly payments be if the interest rate is 6%?<\/li>\n<\/ol>\n<\/li>\n
                                              4. Lynn bought a $300,000 house, paying 10% down, and financing the rest at 6% interest for 30 years.\n
                                                  \n
                                                1. Find her monthly payments.<\/li>\n
                                                2. How much interest will she pay over the life of the loan?<\/li>\n<\/ol>\n<\/li>\n
                                                3. Emile bought a car for $24,000 three years ago. The loan had a 5 year term at 3% interest rate. How much does he still owe on the car?<\/li>\n
                                                4. A friend bought a house 15 years ago, taking out a $120,000 mortgage at 6% for 30 years. How much does she still owe on the mortgage?<\/li>\n<\/ol>\n\n\t\t\t
                                                  \n\t\t\t

                                                  Candela Citations<\/h3>\n\t\t\t\t\t
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