1.1 1. If the total estimated cost of a public four-year college degree 10 years from now is$86,000, how much money would you need to set aside each year in an accountearning 4% annual compounded interest in order to have enough money saved up?2. A retirement fund earns 6% interest, compounded quarterly. If $1,000,000 is desiredto be in the account at the end of 25 years, how much money must you deposit intothe account each quarter?3. One thousand dollars is borrowed for one year at an interest rate of 1% per month. Ifthis sum of money were borrowed for the same period at an interest rate of 12% peryear, what would be the savings in interest expenses?

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1. If the total estimated cost of a public four-year college degree 10 years from now is $86,000, how much money would you need to set aside each year in an account earning 4% annual compounded interest in order to have enough money saved up?

1. If the total estimated cost of a public four-year college degree 10 years from now is $86,000, how much money would you need to set aside each year in an account earning 4% annual compounded interest in order to have enough money saved up?

Microeconomics

13th Edition

ISBN:9781337617406

Author:Roger A. Arnold

Publisher:Roger A. Arnold

Chapter16: Interest, Rent, And Profit

Section: Chapter Questions

Problem 1WNG

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Question

1.1

1. If the total estimated cost of a public four-year college degree 10 years from now is
$86,000, how much money would you need to set aside each year in an account
earning 4% annual compounded interest in order to have enough money saved up?
2. A retirement fund earns 6% interest, compounded quarterly. If $1,000,000 is desired
to be in the account at the end of 25 years, how much money must you deposit into
the account each quarter?
3. One thousand dollars is borrowed for one year at an interest rate of 1% per month. If
this sum of money were borrowed for the same period at an interest rate of 12% per
year, what would be the savings in interest expenses?

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