Find the monthly payment (pymt) that will yield ordinary annuity $100,000 at interest 9.25% for 30 years. (Round the answer to the nearest cent.)
Find the monthly payment (pymt) that will yield ordinary annuity $260,000 at interest 10.5% for 43 years. (Round the answer to the nearest cent.)
I’m having troubles. Thanks.
Marc X
March 11, 2010 at 5:11 pm
1. $823/mo
2. $2,301/mo
Nice online calculator for those with different numbers. There may even be the original formula in there, too.
http://www.1728.com/calcloan.htm
I know it says loan calculator, but that’s all an annuity is, a loan that is owed to YOU and amortizes over a given time.
If you’re building an investment balance, it’s a different formula.
For scenario #1, you’d have to invest $54 each month to build $100,000.
For scenario #2, you’d have to invest $26 each month to accumulate $260,000.
Tony Q
March 11, 2010 at 6:01 pm
m=12 assumed monthly compounded
#1 question
yr= 30 no.of yrs compounded
n= no. of payments
=m*yr
=12*30
=360
%int= 9.25 percent annual interest rate
int= (%int)*/100/m
=9.25/100/12
=0.00770833
=100,000 future value
PMT= ???
the formula to be used in excel is
FV= PMT*[(1+int)^(n)-1]/[int]
using my excel
#1 question
PMT= $51.84
#2 question
int= 10.5/100/12= 0.0525
n= 43*2= 86
FV=260,000
PMT= $25.68
find out yrs compounding
if semi-annual compounded m = 2 and not 12
mister ed
March 11, 2010 at 7:01 pm
you do realize there is an homework section!!!!