##### Rasmussen College FIn1000 Module 5
Downside 1 - Future Worth of Funding If a agency has \$250,000 to speculate and may earn eight.5%, compounded yearly, how a lot will the agency have after two years? Fee Nper PMT PV Kind FV Downside 2 - Future Worth of Retirement Account A self-employed individual deposits \$1,250 yearly in a retirement account that earns 5.5%. What would be the account steadiness at age 62 if the financial savings program begins when the person is age 50? Fee Nper PMT PV Kind FV How a lot further cash will probably be within the account if the saver defers retirement till age 66 and continues the annual contributions till then? Trace: First calculate the FV of the account at age 66 after which subtract the FV decided above (at age 62) to reach on the further cash saved. Fee Nper PMT PV Kind FV Extra cash saved if the contributions proceed till age 66 The primary half is a repeat of 1a. How a lot further cash will probably be within the account if the saver discontinues the contributions at age 62, however lets it construct up till retirement at age 66? Trace: First calculate the FV of the account at age 62, then make the most of the FV of the account at age 62 because the PV within the FV calculation for the subsequent four years. Lastly, subtract the FV of the account at age 62 from the FV of the account with no further contributions to reach on the further cash saved. Fee Nper PMT PV Kind FV Fee Nper PMT PV Kind FV Extra cash saved if contributions cease at age 62, however the cash retains rising till age 66. Downside three - Current Worth of Financial savings Account A father has determined to put aside a one time lump sum for school that may quantity to \$60,000 by the time his 5 yr previous is 18 years previous (13 years). Utilizing eight% as the speed and assuming no additional investments will probably be made, how a lot should the daddy make investments right this moment as a way to have \$60,000 in 13 years? Fee Nper PMT FV Kind PV Downside four - House Mortgage A pair borrows \$935,000 for 7 years for the acquisition of a trip dwelling at an rate of interest of 7%. The mortgage requires that the curiosity and principal be paid in equal, annual funds. The curiosity is decided on the declining steadiness that's owed. What are the required annual funds on the mortgage? Fee Nper PV FV Kind PMT Yearly fee owed How a lot is the principal mortgage steadiness lowered by in the course of the first yr? Trace: To find out the principal paid in yr 1, subtract the curiosity paid in yr 1 from the full yearly fee. Fee Principal mortgage worth Curiosity paid in yr 1 Whole fee made in yr 1 Principal paid the primary yr Downside 5 - Lease Funds An organization leases tools for 7 years. The tools prices \$28,000 and the proprietor needs to earn 9.5% on the lease. What ought to be the required lease funds? Fee Nper PV FV Kind PMT