Asked by Jonathan Miller on May 30, 2024
Verified
What amount today will provide payments of $1,500 at the end of each month starting in 10 years, if the principal amount is to remain untouched, and money can earn 4.85% compounded quarterly?
Compounded quarterly
Interest is recalculated every three months based on both the initial principal and previously earned interest, leading to exponential growth of an investment or debt.
Principal amount
The principal amount refers to the initial sum of money borrowed in a loan or invested, excluding any interest or additional fees.
- Comprehend and utilize the principles of time value of money to compute present and future valuations of different financial instruments.
- Ascertain the monetary valuation of annuities and perpetuities, including but not limited to ordinary annuities, annuities due, deferred annuities, and perpetuities for different rates of compounding.
- Ascertain the magnitude and length of disbursements required to finance particular financial objectives, such as retirement reserves, amortization of loans, and accumulation of funds for educational pursuits or other forthcoming expenditures.
Verified Answer
ZK
Learning Objectives
- Comprehend and utilize the principles of time value of money to compute present and future valuations of different financial instruments.
- Ascertain the monetary valuation of annuities and perpetuities, including but not limited to ordinary annuities, annuities due, deferred annuities, and perpetuities for different rates of compounding.
- Ascertain the magnitude and length of disbursements required to finance particular financial objectives, such as retirement reserves, amortization of loans, and accumulation of funds for educational pursuits or other forthcoming expenditures.
Related questions
$30,000 Is Placed in a Fund Earning 7% Compounded Quarterly ...
A $30,000 Loan Bearing Interest at 9% Compounded Monthly Was ...
Sam Wants to Set Up Scholarships for His Former Secondary ...
Harold, Just Turned 27, Wants to Accumulate an Amount in ...
A Finance Company Paid a Merchant $3,975 for a Conditional ...