Il. Profit Reinvestment inflation is compounded monthly. Then the required dow n payment will be 20% of T. C. Hardware Store wants to construct a new building at a second location. If construction could begin immedi ately, the cost would be $500,000. At this time, however the owners do not have the required 20% down payment so they plan to invest S2000 per month of their profits until they have the necessary amount. They can invest their money in an annuity account that pays 6% compounded monthly, but they are concerned about the 3% average inflation rate in the construction industry. They would like you to give them some projections about how 3% inflation will affect the time required to accrue the down payment and the building's eventual cost. They would also like to know how their projected profits, after the new building is complete, will affect their schedule for paying off the mortgage loan. 0.03 00,0001+ where n is in months. Thus you must findn such that this amount equals the future value of the owners' annuity. The solution to the resultin algebraic methods but can be found with a graphing utility g equation is difficult to obtain by 2. If the 3% annual inflation rate is accurate (compound ed monthly), what will T. C. Hardware's projected construction costs be (to the nearest hundred dollars) when it has its down payment? 3. If T. C. Hardware borrows 80% of its construction costs and amortizes that amount at 7.8% compounded monthly for 15 years, what will its monthly payment be? Finally, the owners believe that 2 years after this new building is begun (that is, after 2 years of payments on the loan), their profits will increase enough so that they'll be able to make double mortgage payments each month until the loan is paid. Under these assumptions, how long wil i take TC. Hardware to pay off the loan? 4. Specifically, the owners would like you to prepare a report that answers the following questions: I. If the 3% annual inflation rate is accurate, how long will it take to get the down payment? Hint : Assume that