Question

Can someone please check my financial algebra work

Answer 1

Missy knows that she needs $40,000 for a down payment on a house. She found an investment that earns 3.05% interest compounding monthly. She would like to purchase the home in 5 years. How much should she put in the account now to ensure she has her down payment?

$8,872.33
$27,770.97
$46,580.69 I chose this response
$34,349.00

Answer 2

Rehan has been awarded some money in a settlement. He has the option to take a lump sum payment of $170,000 or get paid an annuity of $1,000 per month for the next 20 years. Which is the better deal for Rehan, and by how much, assuming the growth rate of the economy is 3.05% per year?

Lump Sum: by $63,712.66
Lump Sum: by $7,707.19 I chose this response
Annuity: by $63,712.66
Annuity: by $7,707.19

Answer 3

Becky is 18 and would like to buy a house when she is 36. What is the discount factor for today’s prices if the housing values increase 6% per year?

65.0%
16.7%
12.3%
35.0% I chose this response

Answer 4

acob is saving up for a down payment on a car. He plans to invest $2,000 at the end of every year for 5 years. If the interest rate on the account is 2.25% compounding annually, what is the present value of the investment?

$5,666.58
$10,461.24 I chose this response
$9,358.91
$37,731.88

Answer 5

Sammy has an annuity that pays him $9600 at the beginning of each year. Assume the economy will grow at a rate of 3.1% annually. What is the value of the annuity if he received it now instead of over a period of 10 years?

$78,044.65
$80,651.16
$81,075.98 I chose this response
$83,999.29

Answer 6

@amistre64

Answer 7

@abb0t

Answer 8

your 1st choice is incorrect... the investment to get a $40000 deposit is greater than the deposit.

so start with A- the future value = $40000 and you need to find P the principal

using the compound interest formula

\[40000 = P \times (1 + \frac{3.05}{100})^{12 \times 5}\]

I've assumes the interest is monthly... if its something else you'll need to change it

Answer 9

ok what about number 2 @campbell_st

Answer 10

so in the 1st question is the interest per annum or per month?

Answer 11

monthly right?

Answer 12

so i think because it states that she found an investment that earns 3.05% interest compounding monthly.

Answer 13

ok.... well that's interesting as the answer doesn't match the choices.

Answer 14

hmm

Answer 15

ok... so in question 1, the interest rate is per annum so you need to change it to monthly

but you are still finding P

\[40000 = A(1 + \frac{3.05 \div 12}{100})^{5 \times 60}\]

Answer 16

40,000×(1+(0.0305/12))60 yeah

Answer 17

so solve for P

Answer 18

oops should be P and not A in the formula

Answer 19

I got by solving 40,000×(1+(0.0305/12))60 =46580.6854454199600147

Answer 20

which is the response i chose

Answer 21

@campbell_st

Answer 22

just check it as I got

\[P = 40000 \div (1 + 0.0305 \div 12)^{60}\]

Answer 23

which gave me the last answer

Answer 24

sorry I can't help with the others, I have to go