Reynaldo Seplveda retires in 20 years and currently has savings of $125,000. Reynaldo thinks he will need $650,000 at the beginning of his retirement and has no additional funds saved. He determines the annual interest rate he will need to meet his goal. (6 points)

8. Suppose you want to purchase heavy equipment machinery and a commercial bank will lend you $65,000 for the transaction. The loan will be amortized over 5 years and the nominal interest rate will be 8% payable monthly. Calculate the monthly payment and annual rate (EAR) of the loan to be amortized. (6 points)