An investor wants to determine how much interest he must earn to be able to make the payments on a 10-year mortgage which has increasing annual payments. The problem is summarized in the accompanying spreadsheet. The investor has enough money to make an initial investment of $9,000 and hopes he can earn 12%, compounded quarterly, on his investments. He would like to know how low his annual return can be and still allow him to make his payments from interest income. What constraint must be entered in the Analytic Solver Platform (ASP) task pane?
A) $D$7:$D$16 ≤ $E$7:$E$16
B) $C$7:$D$16 ≥ $E$7:$E$16
C) $C$7:$C$16 ≥ $E$7:$E$16
D) $D$7:$D$16 ≥ $E$7:$E$16

Question

An investor wants to determine how much interest he must earn to be able to make the payments on a 10-year mortgage which has increasing annual payments. The problem is summarized in the accompanying spreadsheet. The investor has enough money to make an initial investment of $9,000 and hopes he can earn 12%, compounded quarterly, on his investments. He would like to know how low his annual return can be and still allow him to make his payments from interest income. What constraint must be entered in the Analytic Solver Platform (ASP) task pane? 
A) $D$7:$D$16 ≤ $E$7:$E$16 
B) $C$7:$D$16 ≥ $E$7:$E$16 
C) $C$7:$C$16 ≥ $E$7:$E$16 
D) $D$7:$D$16 ≥ $E$7:$E$16

Quizplus · Accepted Answer

The constraint that must be entered in the Analytic Solver Platform (ASP) task pane is $D$7:$D$16 ≥ $E$7:$E$16 which ensures that the total interest earned by the investor is greater than or equal to the total amount of mortgage payments. This means that the investor would be able to make the mortgage payments solely from the interest income earned.

An Investor Wants to Determine How Much Interest He Must