Bedroom Talk
Can anyone help me with my finance homework?
I need help on these questions. 1.Betsy receives $600 on the first of each month. Jen receives $600 on the last day of each month. Both Betsy and Jen will receive payments for four years. At a 7 percent discount rate, what is the difference in the present value of these two sets of payments? 2. You work for a furniture store. You normally sell a living room set for $4,000 and finance the full purchase price for your customers. What you offer your customers: 24 monthly payments at 24% APR. Unfortunately, the economic downturn has caused you to change your marketing technique. To continue to attract customers, you plan to run a zero interest financing sale during which you will finance the set over 24 months at 0% interest. But you really don’t want to sacrifice any profit. How much do you need to charge for the bedroom set during the sale in order to earn your usual combined return on the sale and the financing? 3. Joe wishes to save money to provide for his retirement. Beginning one month from now, he will begin depositing a fixed amount into a retirement savings account that will earn 10% compounded monthly. He will make 420 such deposits. Then, one year after making his final deposit, he will withdraw $75,000 annually for 20 years. The fund will continue to earn 10% compounded monthly. How much should the monthly deposits be for his retirement plan?
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- 3. Joe wishes to save money to provide for his retirement. Beginning one month from now, he will begin depositing a fixed amount into a retirement savings account that will earn 10% compounded monthly. He will make 420 such deposits. Then, one year after making his final deposit, he will withdraw $75,000 annually for 20 years. The fund will continue to earn 10% compounded monthly. How much should the monthly deposits be for his retirement plan? 10% monthly = 10.4713 APR required balance 7,526,698.89 monthly deposit: 1982.46 Transaction Summary: 832634.95 plus 6694063.94 interest is 7526698.89
