Question

Please help show the steps
Please put 15 years old

Answer 1

P = $98.77

Explanation:

FV = p (1+i)^n -1

i

pv = 700,000

i = .075/12 = .00625

n = (66 - 15)* 12 = 612

700,000 = P (( 1 + .00625)^ 612 -1 /.00625

4375 = P (1.00625)^612 -1)

P = $98.77

Answer 2

page 1:

51 years

$98.78

639546.64 (i think)

Page 2:

213 months

17.8 years

321 months

26.8 years

1128.9 months

88.8 years

I would probably choose the second plan because it's rather unlikely that i live past 90

Explanation:

page 1

Let's assume the payments are at the end of the month

66-15= 51 years

effective rate: .075/12=.00625

`700000=x((1+.00625)^(51*12)-1)/(.00625)\\x=98.77973387`

which i guess we can round to 98.78

700000-98.78*(51*12)= 639546.64

This number is really really high and so maybe you want to double check it

page 2

effective rate: .051/12=.00425

`700000=5000(1-(1+.00425)^(-n))/(.00425)\\.405=(1+.00425)^(-n)\\log_(1.00425).405=-n\\n=213`

213 months

213/12= 17.8 years

`700000=4000(1-(1+.00425)^(-n))/(.00425)\\.25625=(1.00425)^(-n)\\log_(1.00425).25625\\n=321`

321 months

321/12=26.8 years

`700000=3000(1-(1+.00425)^(-n))/(.00425)\\.008333333=(1.0045)^(-n)\\log_(1.0045).00833333=-n\\n=1128.9`

1128.9 months

1128.9/12= 94.1 years

1066 months

1066/12= 88.8 years