Jena decided to use the time value of money tools from Chapter 3 to calculate the size of the monthly payments that a typical undergraduate would need to pay the average credit card debt of $1900 over 1 year (12 monthly payments), assuming an annual interest rate of 22.4 percent. If, instead of having to make that credit card payment, a new college graduate invested that same amount monthly for 1 year in a mutual fund earning 7 percent on average, how much would he or she have for retirement if she retained this amount in the account for the next 40 years? Click on the table icon to view the FVIFA table: .

The undergraduates could eliminate their average balance of $1900 with 12 monthly payments of $ __________________ (Round to the nearest cent.)

If, instead of having to make that credit card payment, a new college graduate invested that same amount monthly for 1 year in a mutual fund earning 7 percent on average, the amount he or she would have for retirement if she retained this amount in the account for the next 40 year $_________________

\begin{tabular}{|c|c|} Future Value of an Annuity (FVIFA) \\ \hline & n=12 \\ \hline 5%/12 & 12.2789 \\ \hline 6%/12 & 12.3356 \\ \hline 7%/12 & 12.3926 \\ \hline 8%/12 & 12.4499 \\ \hline 9%/12 & 12.5076 \\ \hline 10%/12 & 12.5656 \\ \hline \end{tabular} Compound Sum of \$1 (FVIF) \begin{tabular}{|c|c|c|} \hline & n=39 & n=40 \\ \hline 5% & 8.5572 & 8.9850 \\ \hline 6% & 12.9855 & 13.7646 \\ \hline 7% & 19.6285 & 21.0025 \\ \hline 8% & 29.5560 & 31.9204 \\ \hline 9% & 44.3370 & 48.3273 \\ \hline 10% & 66.2641 & 72.8905 \\ \hline \end{tabular} \begin{tabular}{|} Present Value of an Annuity (PVIFA) \\ \hline & n=12 \\ \hline 22.0%/12 & 10.6844 \\ \hline 22.1%/12 & 10.6789 \\ \hline 22.2%/12 & 10.6734 \\ \hline 22.3%/12 & 10.6679 \\ \hline 22.4%/12 & 10.6625 \\ \hline 22.5%/12 & 10.6570 \\ \hline 22.6%/12 & 10.6515 \\ \hline 22.7%/12 & 10.6460 \\ \hline 22.8%/12 & 10.6406 \\ \hline 22.9%/12 & 10.6351 \\ \hline 23.0%/12 & 10.6297 \\ \hline \end{tabular}