1.) You are graduating from college at the end of this semester and after reading The Business of Life box in this chapter, you have decided to invest $5,500 at the end of each year into a Roth IRA for the next 42 years. If you earn 7 percent compounded annually on your investment, how much will you have when you retire in 42 years? How much will you have if you wait 10 years before beginning to save and only make 32 payments into your retirement account?

2.) Mr. Bill S. Preston, Esq., purchased a new house for $60,000. He paid $25,000 upfront and agreed to pay the rest over the next 20 years in 20 equal annual payments that include principal payments plus 12 percent compound interest on the unpaid balance. What will these equal payments be?

3.)To pay for your child's education, you wish to have accumulated $14,000 at the end of 8 years. To do this, you plan to deposit an equal amount into the bank at the end of each year. If the bank is willing to pay 14 percent compounded annually, how much must you deposit each year to obtain your goal?

4.) How long will it take to pay off a loan of $52,000 at an annual rate of 12 percent compounded monthly if you make monthly payments of

$650? Use five decimal places for the monthly percentage rate in your calculations.