32. Your client has been given a trust fund valued at $1.15 million. He cannot access the money until he turns 65 years old, which is in 30 years. At that time, he can withdraw $22,500 per month.

If the trust fund is invested at a 4.0 percent rate, compounded monthly, how many months will it last your client once he starts to withdraw the money? (Do not round intermediate calculations and round your final answer to 2 decimal places.)

Number of months

6.

Problem 4 and 5-1 Future Value

Consider that you are 45 years old and have just changed to a new job. You have $79,000 in the retirement plan from your former employer. You can roll that money into the retirement plan of the new employer. You will also contribute $3,500 each year into your new employers plan.

If the rolled-over money and the new contributions both earn a 5 percent return, how much should you expect to have when you retire in 20 years? (Do not round intermediate calculations and round your final answer to 2 decimal places.)

Future value $

8.

Problem 4 and 5-7 House Appreciation and Mortgage Payments

Say that you purchase a house for $260,000 by getting a mortgage for $230,000 and paying a $30,000 down payment. If you get a 30-year mortgage with a 6 percent interest rate, what are the monthly payments? (Do not round intermediate calculations and round your final answer to 2 decimal places.)

PMT $

What would the loan balance be in ten years? (Round the payment amount to the nearest cent but do not round any other interim calculations. Round your final answer to 2 decimal places.)

PVA $

If the house appreciates at 2 percent per year, what will be the value of the house in ten years? (Do not round intermediate calculations and round your final answer to 2 decimal places.)

FV $

How much of this value is your equity? (Do not round intermediate calculations and round your final answer to 2 decimal places.)

Equity $

11.Problem 4 and 5-6 Present Value and Annuity Payments

A local furniture store is advertising a deal in which you buy a $5,700 living room set with three years before you need to make any payments (no interest cost is incurred).

How much money would you have to deposit now in a savings account earning 6 percent APR, compounded monthly, to pay the $5,700 bill in three years? (Do not round intermediate calculations and round your final answer to 2 decimal places.)

Present value $

How much would you have to deposit in the savings account each month to be able to pay the bill? (Do not round intermediate calculations and round your final answer to 2 decimal places.)

Annuity payment $

Problem 5-32 Compound Frequency (LG7)

Payday loans are very short-term loans that charge very high interest rates. You can borrow $300 today and repay $369 in two weeks. What is the compounded annual rate implied by this 23 percent rate charged for only two weeks? (Do not round intermediate calculations and round your final answer to 2 decimal places.)

23.What annual rate of return is earned on a $1,000 investment when it grows to $2,300 in six years? (Do not round intermediate calculations and round your final answer to 2 decimal places.)

Annual rate of return %

To borrow $3,000, you are offered an add-on interest loan at 11 percent with 12 monthly payments.

Compute the 12 equal payments. (Round your answer to 2 decimal places.)

Equal payment $

Compute the EAR of the loan. (Do not round intermediate calculations and round your final answer to 2 decimal places.)

EAR %