PVA= PMT 1-1/(1+1) FVA= PMT (1 + i)". 1 FV. = PV(1 + i)" PV = FV (1 + i) Reminder: For an annuity due, multiply by (1+i) 1. a. Calculate the monthly payment for a car if $15,000 is financed for 4 years at 4.8% annual interest, compounded monthly PV = FV - PMT = Equation: Answer: b. If the same car is financed for 3 years at 4.5% annual interest, which loan will have the lower total interest cost over the life of the loan, the 3 year loan or the 4 year loan? Answer: year loan 2. a. If you deposit $5,000 into an account cach year for 30 years, how much will you have after 30 years if the account earns 4% annual compound interest after taxes? PV - - FV- PMT - Equation: Answer: b. After the 30 years of saving, how much can you withdraw from this account each year for 20 years to leave a zero balance assuming the after-tax interest rate on the account stays 4% PV = FV PMT = Equation