1. I have saved up $200,000 to this point, but I am aiming at a future value of $1,500,000. How much do I need to invest each month for the next 25 years if my investments earn a constant rate of 7.5% per year? Assume monthly compounding and that my monthly investments start at the END of the current month.
2. Assume that you are going to start saving for a Ford Fiesta. You figure you have 3 years until you will need to replace your current ride. Further, you determine that you will be able to buy the Fiesta in 36 months for $13,500 if you set aside (invest) $329 each month, starting at the end of this month. What (annual) interest rate is required to achieve the desired future value, assuming monthly compounding?
3.What is the payment required on a business loan that requires QUARTERLY payments, assuming the loan amount is $10 million, the interest rate is 7.5% and the term of the loan is 5 years?