Question
1) You want to buy a new sports car from Muscle Motors for $33,000. The contract is in the form of a 60-month annuity due
1) You want to buy a new sports car from Muscle Motors for $33,000. The contract is in the form of a 60-month annuity due at a 7.50 percent APR. Required: What will your monthly payment be? $670.29
$661.25
$657.15
$624.29
$644.00
2) Bilbo Baggins wants to save money to meet three objectives. First, he would like to be able to retire 30 years from now with retirement income of $20,000 per month for 25 years, with the first payment received 30 years and 1 month from now. Second, he would like to purchase a cabin in Rivendell in 20 years at an estimated cost of $1,552,000. Third, after he passes on at the end of the 25 years of withdrawals, he would like to leave an inheritance of $800,000 to his nephew Frodo. He can afford to save $2,400 per month for the next 20 years. Required: If he can earn a 11 percent EAR before he retires and a 8 percent EAR after he retires, how much will he have to save each month in years 21 through 30?
$8,080.24
$7,763.37
$7,921.81
$10,453.35
$11,315.27
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