Savings plan formula

MAT 043 Lesson 23: Savings plan This is used when payments are regularly added to an account. Savings plan formula: 𝐀 = ππŒπ“ 𝐱 [ (𝟏+ 𝐀𝐏𝐑 (𝐧𝐘) ) βˆ’πŸ 𝐧 𝐀𝐏𝐑 ( ) 𝐧 ] A = total amount after y years PMT = amount of the payment APR = annual percentage rate n = number of payments made per year Y = time in years Use the savings plan formula to find each missing value. Round each monetary answer to the nearest cent if needed. Show your work! 1. PMT = $500, APR = 2.5%, n = 12, Y = 20 yr. 2. A = $200,500, APR = 12%, n = 4, Y = 12 yr. Practice Problems 3. PMT = $75, APR = 7%, n = 12, Y = 10 yr. 1 4. PMT = $250, APR = 1.5%, n = 6, Y = 8 yr. 5. A = $17,000, APR = 2.55%, n = 12, Y = 3 yr. 6. A = $10,000, APR = 8%, n = 12, Y = 6 yr. 7. At age 30, Michelle starts an IRA (Individual Retirement Account) to save for retirement. She deposits $100 at the end of each month. If she can count on an APR of 6%, how much will she have when she retires at age 65? 8. You want to build a $100, 000 college fund in 18 years by making a regular, end-of-month deposits. Assuming an APR of 7%, calculate how much you should deposit monthly. 2 MAT 043 Lesson 24: Loan Payments This is used to calculate the payment amounts on a loan. Loan payment formula: 𝐀𝐏𝐑 ) 𝐧 (βˆ’π§π˜) 𝐀𝐏𝐑 𝐏𝐱( ππŒπ“ = [πŸβˆ’(𝟏+ 𝐧 ) ] P = principal amount of loan PMT = amount of the payment APR = annual percentage rate n = number of payment is made per year Y = time in years Use the loan payment formula to find each missing value. Round each monetary answer to the nearest cent if needed. Show your work! 1. P = $22,500, APR = 5.4%, n = 12, Y = 8 yr. 2. PMT = $300, APR = 5.8%, n = 12, Y = 8 yr. Practice Problems 3. P = $350,000, APR = 7.8%, n = 12, Y = 30 yr. 1 4. P = $45,000, APR = 3.9%, n = 12, Y = 5 yr. 5. PMT = $750, APR = 7.9%, n = 12, Y = 30 yr. 6. PMT = $180, APR = 21%, n = 12, Y = 4 yr. 7. For a loan of $24,000 at a fixed APR of 8% for 15 years, find the monthly payment. 8. You can afford a monthly payment of $375 for a new car loan. You want the loan to last for 5 years so that you can take advantage of a 1.9% APR offer. What price can you afford for a new car? 2 MAT 043 Lesson 24: Loan Payments This is used to calculate the payment amounts on a loan. Loan payment formula: 𝐀𝐏𝐑 ) 𝐧 (βˆ’π§π˜) 𝐀𝐏𝐑 𝐏𝐱( ππŒπ“ = [πŸβˆ’(𝟏+ 𝐧 ) ] P = principal amount of loan PMT = amount of the payment APR = annual percentage rate n = number of payment is made per year Y = time in years Use the loan payment formula to find each missing value. Round each monetary answer to the nearest cent if needed. Show your work! 1. P = $22,500, APR = 5.4%, n = 12, Y = 8 yr. 2. PMT = $300, APR = 5.8%, n = 12, Y = 8 yr. Practice Problems 3. P = $350,000, APR = 7.8%, n = 12, Y = 30 yr. 1 4. P = $45,000, APR = 3.9%, n = 12, Y = 5 yr. 5. PMT = $750, APR = 7.9%, n = 12, Y = 30 yr. 6. PMT = $180, APR = 21%, n = 12, Y = 4 yr. 7. For a loan of $24,000 at a fixed APR of 8% for 15 years, find the monthly payment. 8. You can afford a monthly payment of $375 for a new car loan. You want the loan to last for 5 years so that you can take advantage of a 1.9% APR offer. What price can you afford for a new car? 2 MAT 043 Lesson 24: Loan Payments This is used to calculate the payment amounts on a loan. Loan payment formula: 𝐀𝐏𝐑 ) 𝐧 (βˆ’π§π˜) 𝐀𝐏𝐑 𝐏𝐱( ππŒπ“ = [πŸβˆ’(𝟏+ 𝐧 ) ] P = principal amount of loan PMT = amount of the payment APR = annual percentage rate n = number of payment is made per year Y = time in years Use the loan payment formula to find each missing value. Round each monetary answer to the nearest cent if needed. Show your work! 1. P = $22,500, APR = 5.4%, n = 12, Y = 8 yr. 2. PMT = $300, APR = 5.8%, n = 12, Y = 8 yr. Practice Problems 3. P = $350,000, APR = 7.8%, n = 12, Y = 30 yr. 1 4. P = $45,000, APR = 3.9%, n = 12, Y = 5 yr. 5. PMT = $750, APR = 7.9%, n = 12, Y = 30 yr. 6. PMT = $180, APR = 21%, n = 12, Y = 4 yr. 7. For a loan of $24,000 at a fixed APR of 8% for 15 years, find the monthly payment. 8. You can afford a monthly payment of $375 for a new car loan. You want the loan to last for 5 years so that you can take advantage of a 1.9% APR offer. What price can you afford for a new car? 2 MAT 043 Lesson 23: Savings plan This is used when payments are regularly added to an account. Savings plan formula: 𝐀 = ππŒπ“ 𝐱 [ (𝟏+ 𝐀𝐏𝐑 (𝐧𝐘) ) βˆ’πŸ 𝐧 𝐀𝐏𝐑 ( ) 𝐧 ] A = total amount after y years PMT = amount of the payment APR = annual percentage rate n = number of payments made per year Y = time in years Use the savings plan formula to find each missing value. Round each monetary answer to the nearest cent if needed. Show your work! 1. PMT = $500, APR = 2.5%, n = 12, Y = 20 yr. 2. A = $200,500, APR = 12%, n = 4, Y = 12 yr. Practice Problems 3. PMT = $75, APR = 7%, n = 12, Y = 10 yr. 1 4. PMT = $250, APR = 1.5%, n = 6, Y = 8 yr. 5. A = $17,000, APR = 2.55%, n = 12, Y = 3 yr. 6. A = $10,000, APR = 8%, n = 12, Y = 6 yr. 7. At age 30, Michelle starts an IRA (Individual Retirement Account) to save for retirement. She deposits $100 at the end of each month. If she can count on an APR of 6%, how much will she have when she retires at age 65? 8. You want to build a $100, 000 college fund in 18 years by making a regular, end-of-month deposits. Assuming an APR of 7%, calculate how much you should deposit monthly. 2 MAT 043 Lesson 24: Loan Payments This is used to calculate the payment amounts on a loan. Loan payment formula: 𝐀𝐏𝐑 ) 𝐧 (βˆ’π§π˜) 𝐀𝐏𝐑 𝐏𝐱( ππŒπ“ = [πŸβˆ’(𝟏+ 𝐧 ) ] P = principal amount of loan PMT = amount of the payment APR = annual percentage rate n = number of payment is made per year Y = time in years Use the loan payment formula to find each missing value. Round each monetary answer to the nearest cent if needed. Show your work! 1. P = $22,500, APR = 5.4%, n = 12, Y = 8 yr. 2. PMT = $300, APR = 5.8%, n = 12, Y = 8 yr. Practice Problems 3. P = $350,000, APR = 7.8%, n = 12, Y = 30 yr. 1 4. P = $45,000, APR = 3.9%, n = 12, Y = 5 yr. 5. PMT = $750, APR = 7.9%, n = 12, Y = 30 yr. 6. PMT = $180, APR = 21%, n = 12, Y = 4 yr. 7. For a loan of $24,000 at a fixed APR of 8% for 15 years, find the monthly payment. 8. You can afford a monthly payment of $375 for a new car loan. You want the loan to last for 5 years so that you can take advantage of a 1.9% APR offer. What price can you afford for a new car? 2 MAT 043 Lesson 19: Budgeting Activity For this activity, you may use estimated amount for your current income and expenses, OR you may use estimated amounts for income and expenses that you expect to have upon completion of your education. In the chart below, list all sources of income with the estimated monthly amount. Sources of Income (Examples: job, financial aid, child support, Approximate Monthly Amount interest, etc.) Total Income In the chart below, list all expenses with the estimated monthly amount. Expenses (Examples: rent, tuition, car payment, car Approximate Monthly Amount insurance, utilities, food, gas, medical, etc.) Total Expenses 1 Using the totals from your charts, answer the following: 1. What is your total income per month? 2. What is your total expenses per month? 3. What is your monthly cash flow (income – expenses)? 4. Is your cash flow positive or negative? 5. If your cash flow is negative, what can you change to improve your financial situation? (Please answer this question even if your cash flow is positive. What would you do if it ever became a negative cash flow?) 6. If your cash flow is positive, what are your plans for the extra money you have? (Please answer this question even if your cash flow is negative. What would you do with any extra money per month?) 2
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