12. Mr. Fletcher opened an IRA account on January 31, 1980 with a $3,500 deposit. He made not additional deposits, until January 31, 1985, when he began to make $1,500 deposits each January 31 until January 31, 2008. How much will be in the account on January 31, 2008 if the account earns 7% interest compounded annually? 13. A family is thinking about buying a new house costing $470,000. They must pay a 20% down payment. The rest is to be amortized over 30 years in equal monthly payments. If the loans interest rate is 6.6% compounded monthly, what will their monthly payment be? How much total interest will be paid over the 30 years? 14. Suppose that you can afford monthly car payments of no more than $300 and need to borrow $12,000 to buy the car you want. The bank offers loans at 7.5% annual interest rate for a 4-year loan. Will you be able to buy the car you want? 15. Sarah is single and earned wages of $36,000 last year. She earned $480 in interest and $5,800 in tips. Sarah contributed $4,400 to a tax-deferred retirement savings plan and took the standard deduction of $6,100 last year. (The exemption allowed per person is $3,900.) a) Calculate Sarah's gross income. b) Calculate Sarah's adjusted gross income. c) Calculate Sarah's taxable income. d) Sarah is in the 15% tax bracket. If at the end of this year, her income and contribution to a tax-deferred retirement savings plan remain the same as last year, and she is able to claim $9,300 in itemized deductions, how much will she save in taxes? 16. Chan and Lin are married and file taxes jointly. Their combined wages were $88,300. Lin also earned $1,400 in tips and they received $920 in interest from a savings account. They netted $3,000 from a rental property they own. They contributed $8600 to a 401(k) tax-deferred retirement account and have a total of $12,300 in itemized deductions. (The exemption allowed per person is $3,900 and the standard deduction is $12,200). a) What is their gross income? b) What is their adjusted gross income? c) What is their taxable income? d) By how much will their annual take-home pay be reduced if they increase their annual contribution to their 401(k) account to 12,000? e) Find the tax due based on the taxable income found in part (c). 17. Alona is in the 33% tax bracket and itemized her deductions. a) How much will her tax bill be reduced if she qualifies for a $200 tax credit? b) How much will her tax bill be reduced if she makes a $500 contribution to charity