8. Assume that your parents wanted to have $150,000 saved for universify thy your 1 Bth birthday and they startend waving can your first birthday. They saved the same amount each year on your birthday and eamed 12.0% per year on their inveditments. a. How much would they have to save each year to reach their goal? b. If they think you will take five years instead of four to graduate and decide to have $190,000 saved, just in case, how much would thoy have to save each year to reach their new goal? a. To reach the goal of $150,000, the amount they have to save each year is $ (Round to the nearest cent) b. To reach the goal of $190,000, the amount they have to save each year is $ (Round to the nearest cent.) 9. You started an investment account 10 years ago with $1000, and it now has grown to $5000. a. What annual rate of roturn have you earned (you have made no additional contnbutions to the account)? b. If the investment account earns 15% per year from now on, what will the account's value be ten years from now? a. The annual rate of retum is (Round to two decimal places.) b. The account's value will be s (Round to the nearest dollar.) 10. You would like to buy a house that costs $350,000. You have $50,000 in cash that you can put down on the house, but you need to borrow the rest of the purchase price. The bank is offering you a 30 -year mortgage that requires annual payments and has an interest rate of 10% per year. You can afford to pay only $30,550 per year. The bank agrees to allow you to pay this amount each year, yet still borrow $300,000. At the end of the mortgage (in 30 years). you must make a balloon payment; that is, you must repay the remaining balance on the mortgage. How much will be this balloon payment? Hint: The balloon payment will be in addition to the 30 th payment. The balloon payment is 5 (Round to the nearest dollar.) 11. You are saving for retirement. To live comfortably, you decide you will need to save $1 million by the time you are 65 . Today is your 35 th birthday. and you decide, starting today and continuing on every birthday up to and including your 65 th birthday, that you will put the same amount into a savings account. If the interest rate is 6%, how much must you set aside each year to make sure that you will have $1 million in the account on your 65 th birthday? The amount to deposit each year is: (Round to the nearest dollar.) 12. You have just turned 22 years old, received your bachelor's degree, and accepted your first job. Now you must decide how much money to put into your retirement plan. The plan works as follows: Every dollar in the plan earns 6.7% per year. You cannot make withdrawals until you retire on your 65 th birthday. After that, you can make withdrawals as you see fit You decide that you will plan to live to 100 and work until you tum 65 . You estimate that to live comfortably in retirement, you Will need $130,000 per year, starting at the end of the first year of retirement and ending on your 100 th birthday. You will contribute the same amount to the plan at the end of every year that you work. How much do you need to contribute each year to fund your retirement? Your annual contribution should be 5 (Round to the nearest cent.)