I'm very confused on how i'm doing these problems. For the firstproblem I got $61,856.44 total, $23,256.44 of it is interest. That$61,856.44 is then inserted to the normal compound interest formulaand we get $243,800.78 with an interest of $205,200.78
I'm mostly caught up on #3 and I'm having a lot of difficultyeven getting it started.
Bob makes his first monthly $200 deposit into an IRA earning 5.5% compounded monthly on his 24th birthday and his last $200 deposit on his 40th birthday (193 equal deposits in all). With no additional deposits, the money in the IRA continues to earn 5.5% interest compounded monthly until Bob retires on his 65th birthday. How much is in the IRA when Bob retires? How much of this is interest? A person establishes a fund for retirement by contributing $7,500 per year at the end of each year for 20 years. For the next 20 years, equal yearly payments are withdrawn, at the end of which time the account will have a zero balance. If money is worth 8% compounded annually, what yearly payments will the person receive for the last 20 years? educing Interest Payments on a Home Mortgage In appreciation for her parents' financial support of her college education, a recent graduate, Mary, intends to save her parents some money on the financing of their home. Mary's parents have just made the 120th monthly payment on a 30-year loan of $200,000 at 6.5%. How much would be saved in interest payments if Mary were able to find a lender willing to refinance the unpaid balance over 15 years at 4%? Assume the cost of refinancing is 3% of the loan which will be added to the loan balance. Instead of refinancing, Mary decides to contribute $200 each month to reduce the principal until the loan is paid off. How much will Mary save her parents in interest payments? How much would she contribute? Does the plan in part (a) or part (b) make better financial sense? Why?
