1. College expenses at a private college currently average $35,000 per year. It is estimated that these expenses are increasing at the rate of ½% per month. What is the estimated cost of a year of college 10 years from now?
2. What is the present value of $50,000 in 10 years at 3% interest compounded monthly?
3. Investment Value An investment will pay $10,000 in 2 years and then $5000 1 year later. If the current market interest rate is 2.7% compounded monthly, what should a rational person be willing to pay for the investment?
4. Car Loan A woman purchases a car for $12,000. She pays $3,000 as a down payment and finances the remaining amount at 6% interest compounded monthly for 4 years. What is her monthly car payment?