Q7. Bob plans on saving$3,200 a year and expects to earn an annual rate of 5.25 percent.

How much will he have in his account at the end of 40 years?

(Hint: Find future value of annuity-multiple payments)

Q8. You are borrowing $28,500 to buy a car. The terms of the loan call for monthly

payments for 5 years at 4.5 percent interest. What is the amount of each payment?

(Hint: Use PMT formula and note that the payments are monthly)

Q9. Joe can afford $300 a month for 5 years for a car loan. If the interest rate is 4.65

percent, how much can he afford to borrow to purchase a car?

(Hint: This is an annuity present value question involving payment on a monthly basis)