Question

1)You plan to deposit $100 in a savings account at the end of each month for the next 10 years. How much will you have in 10 years, assuming a 2% annual interest rate.

2)You wish to purchase a car that costs $22,000 today. You will put $2,000 down and borrow the remaining $20,000. The interest will be 2.00% and you will make monthly payments (end of month) over 5 years. What will your monthly payment be?

I need help figuring out the functions for these. I got currently =FV(0.02/12,10*12,-100) for the first one and for the second one =PMT(0.02/12,12*5,-20000).

Answer 1

Please refer to below spreadsheet for calculation and answer. Cell reference also provided.

A _I 21) $100.00 Monthly deposit Years Annual interest rate 2% Future value at end of 10th year $13,271.97 92) Loan Amount Annual interest rate Term (years) $20,000.00 2% Monthly payment $350.56

Cell reference -

B 2 1) Monthly deposit Years Annual interest rate 10 mt 0.02 Future value at end of 10th year =FV(C4/12,C3*12,-C2,,0) =22000-2000 10 0.02 92) Loan Amount Annual interest rate 11 Term (years) 12 Monthly payment 13 =PMT(C10/12,c11*12,-C9,,0) 14 16

Hope this will help, please do comment if you need any further explanation. Your feedback would be highly appreciated.