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# Luis has \$110,000 in his retirement account at his present company. Because he is assuming a…

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Luis has \$110,000 in his retirement account at his present company. Because he is assuming a position with another company, Luis is planning to “roll over” his assets to a new account. Luis also plans to put \$3000/quarter into the new account until his retirement 30 years from now. If the new account earns interest at the rate of 2.5%/year compounded quarterly, how much will Luis have in his account at the time of his retirement? Hint: Use the compound interest formula and the annuity formula. (Round your answer to the nearest cent.)

LupĂ© made a down payment of \$5000 toward the purchase of a new car. To pay the balance of the purchase price, she has secured a loan from her bank at the rate of 9%/year compounded monthly. Under the terms of her finance agreement she is required to make payments of \$440/month for 60 months. What is the cash price of the car? (Round your answer to the nearest cent.)

The Johnsons have accumulated a nest egg of \$40,000 that they intend to use as a down payment toward the purchase of a new house. Because their present gross income has placed them in a relatively high tax bracket, they have decided to invest a minimum of \$2400/month in monthly payments (to take advantage of the tax deduction) toward the purchase of their house. However, because of other financial obligations, their monthly payments should not exceed \$3000. If local mortgage rates are 4.5%/year compounded monthly for a conventional 30-year mortgage, what is the price range of houses that they should consider? (Round your answers to the nearest cent.)

 least expensive \$ most expensive \$

The Johnsons have accumulated a nest egg of \$40,000 that they intend to use as a down payment toward the purchase of a new house. Because their present gross income has placed them in a relatively high tax bracket, they have decided to invest a minimum of \$2600/month in monthly payments (to take advantage of the tax deduction) toward the purchase of their house. However, because of other financial obligations, their monthly payments should not exceed \$2900. If the Johnsons decide to secure a 15-year mortgage, what is the price range of houses that they should consider when the local mortgage rate for this type of loan is 4%/year compounded monthly? (Round your answers to the nearest cent.)

 least expensive \$ most expensive \$