Tara just received a call from a lawyer, who informed her that a distant cousin of hers left her 600 shares of preferred stock.The attorney told Tara that the inheritance was worth approximately $30,000 and the shares paid a dividend of $4.19 per year.What rate of return is the stock getting? _______________

If Tara knows that other investments similar to this one are earning 7%, should she keep the stock or sell it? ____________

7.Heather's Healthy Products, Inc. is talking with its bank about a $600,000 commercial loan.The loan will be for three years at 7% and will makeLEVEL TOTAL PAYMENTSat the end of each of the three years.Write an amortization schedule for the loan and fill in the following blanks.

Amount of annual TOTAL payment ___________________

Balance of loan at the end of year one __________________

Amount of interest in year two ________________________

Amount of the principal payment in year two ______________

Total amount of interest paid over the life of the loan __________________

8.Use the formulafor the following problem.

Thomas has $7,000 saved from working summers.He has it in an account earning 4% with quarterly compounding and will leave it there until he graduates from college in three years.How much will he have when he graduates?