b) Find the future values of the following ordinary annuities:

FV of $600 paid each 6 months for 5 years at a nominal rate of 9% compounded semiannually. Do not round intermediate calculations. Round your answer to the nearest cent.

$__?__

FV of $300 paid each 3 months for 5 years at a nominal rate of 9% compounded quarterly. Do not round intermediate calculations. Round your answer to the nearest cent.

$__?__

These annuities receive the same amount of cash during the 5-year period and earn interest at the same nominal rate, yet the annuity in part b ends up larger than the one in part a. Why does this occur, choose the correct option that is in parenthesis?

(The nominal deposits into the annuity in part (b) are greater than the nominal deposits into the annuity in part (a).)

(The annuity in part (a) is compounded less frequently; therefore, more interest is earned on previously-earned interest.)

(The annuity in part (a) is compounded more frequently; therefore, more interest is earned on previously-earned interest.)

(The annuity in part (b) is compounded less frequently; therefore, more interest is earned on previously-earned interest.)

(The annuity in part (b) is compounded more frequently; therefore, more interest is earned on previously-earned interest.)

c) You have saved $3,000 for a down payment on a new car. The largest monthly payment you can afford is $300. The loan will have a 15% APR based on end-of-month payments. What is the most expensive car you can afford if you finance it for 48 months? For 60 months? Do not round intermediate calculations. Round your answers to the nearest cent.

Financed for 48 months: $__?__

Financed for 60 months: $__?__