with Finance Questions - Clarification with Steps

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In summary, the conversation discusses different financial scenarios involving investments, savings, and loans. The first question is about the value of an investment after 2 and a half years with a 4.3% monthly interest rate. The second question involves calculating the remaining amount in an account after 3 years with a 2.7% semi-annual interest rate. The third question involves finding the monthly payment for a mortgage of $300,000 with a 7.3% quarterly interest rate and 25-year amortization. The fourth question uses a TVM solver to determine the time it will take to pay off a debt of $5,700 with a 2.5% monthly interest rate and $500 monthly payments. The fifth
  • #1
supergenius04
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Hello,

I have some questions which I wanted to clarify because I was finding them a bit confusing.
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1. Jacob invests \$1,500 at 4.3% compounded monthly, what is the value of the investment after 2 and a half years?

2. Alexander deposits \$70 monthly into an account which pays 2.7% compounded semi-annually. How much remains in the account after 3 years?

3. Michelle borrowed \$300000 to buy a new home at 7.3% compounded quarterly. If the amortization on the mortgage is 25 years, what is her monthly payment?

4. Jerry owes \$5700 to the bank at 2.5% compounded monthly. He can manage payments of \$500 per month. How long will it take to pay off the debt? (Use a TVM solver)

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5. To save for college, Charlene invested her summer earnings of \$4200 in an account with 6.2% interest per annum, compounded semi-annually. She plans to leave the money in the account for 4 years.

a) What amount of the money will she have at the end of the 4 years?
b) How much interest will she have earned?

6. Amy wants to have \$6500 to buy furniture when she moves into an apartment in 3 years. How much should she invest today at 6.3% per annum, compounded monthly?

7. Gail's grandmother saved for a trip by depositing \$400 at the end of each month for 18 months. The account earns 4.8% per annum, compounded monthly. How much will be in the account when the last deposit is made?
 
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Hello and welcome to MHB, supergenius04! :D

We ask that no more than 2 questions be asked in a thread, and if a question has multiple parts please only ask that one question.

We also ask that people posting questions show what they have tried so our helpers know where you are stuck, and will then know how best to help.

Can you show us what you have tried?
 

1. What is finance?

Finance is the study of how individuals, businesses, and governments manage money. It involves making decisions about how to raise, invest, and spend money in order to achieve financial goals.

2. What are the main areas of finance?

The main areas of finance include financial management, investments, financial institutions and markets, and international finance. Financial management focuses on managing the finances of businesses and individuals. Investments involves buying and selling financial assets, such as stocks and bonds. Financial institutions and markets refer to the institutions and systems that facilitate the flow of money and financial assets. International finance deals with financial interactions between countries.

3. What are the steps to solving finance problems?

The steps to solving finance problems include identifying the problem, gathering relevant information, formulating a plan or strategy, performing calculations, and evaluating the results. It is important to clearly define the problem and use accurate and up-to-date information in order to come up with a sound solution.

4. How do I calculate the present value of an investment?

The present value of an investment is calculated by dividing the future value of the investment by the discount rate, which represents the expected rate of return. The formula is: present value = future value / (1 + discount rate)^n, where n is the number of time periods. It is important to note that the discount rate should reflect the riskiness of the investment.

5. What is the difference between stocks and bonds?

Stocks represent ownership in a company, while bonds are a form of debt. When you buy a stock, you are buying a share of ownership in the company and have the potential to earn dividends and capital gains. When you buy a bond, you are essentially loaning money to the issuer and will receive interest payments. Stocks are generally considered riskier, but also have the potential for higher returns, while bonds are seen as a lower risk, lower return investment.

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