Question #1

You have been accepted into college. The college guarantees that your tuition will not increase for the four years you attend college. The first $10,200 tuition payment is due in six months. After that, the same payment is due every six months until you have made a total of eight payments. The college offers a bank account that allows you to withdraw money every six months and has a fixed APR of 3.6% (with semiannual compounding) guaranteed to remain the same over the next four years. How much money must you deposit today if you intend to make no further deposits and would like to make all the tuition payments from this account, leaving the account empty when the last payment is made? (Note: Be careful not to round any intermediate steps less than six decimal places.)

The amount of money you must deposit today is $... Round to the nearest cent.)

Question #2

You are thinking about leasing a car. The purchase price of the car is $30,000. The residual value (the amount you could pay to keep the car at the end of the lease) is $15,000 at the end of 36 months. Assume the first lease payment is due one month after you get the car. The interest rate implicit in the lease is 6% APR, compounded monthly. What will be your lease payments for a 36-month lease? (Note: Be careful not to round any intermediate steps less than six decimal places.)

Your monthly lease payments will be $... (Round to the nearest cent.)

Question #3

You have an outstanding student loan with required payments of $550 per month for the next four years. The interest rate on the loan is 10% APR (compounded monthly). Now that you realize your best investment is to prepay your student loan, you decide to prepay as much as you can each month. Looking at your budget, you can afford to pay an extra $150 a month in addition to your required monthly payments of $550, or $700 in total each month. How long will it take you to pay off the loan? (Note: Be careful not to round any intermediate steps less than six decimal places.)

The number of months to pay off the loan is ... (Round to two decimal places.)

Please answer all 3 questions.