Question

Rajesh inherited an investment account with a current balance of 30,000. it compounds monthly with a rate of 9.48%. He has made arrangements to withdraw $250 automatically every month to pay off his 10-year student loan. Will Rajesh have enough money in the account to cover all of the required loan payments?

Answer 1

Explanation:

Assuming the interest rate remains constant throughout the 10-year period, Rajesh will have enough money in the account to cover all of the required loan payments. The total amount of money he will withdraw over the 10-year period will be $30,000 (250 x 12 months x 10 years). At the end of the 10-year period, he will have $50,847.90 in the account, which is more than enough to cover the required loan payments.