ANNUITIES

Please use Excel function to answer the following:

1. Suppose you are buying a car with the following information

car price: $32,000

Number of monthly payments 48

APR: 6.00%

What is the monthly payment?

2. Suppose you are saving for your retirement. You are 23 Years old and you want to retire in 42 years.

Retirement goal: $1,200,000

APR: 6.5%

a. How much will you need to save each month in order to meet your retirement goal?

b. If your retirement goal is 1,500,000 instead and you will save the same amount each month found in part (a), what is the APR you need to earn in order to meet the retirement goal of $1,500,000?

3. If your retirement goal is $1,500,000 and you are able to save $1,200 each month, how many years do you need o have $1,500,000 in your retirement account, assuming APR is 8%?