Question

1. Suppose you are the executor of your Aunt's estate, and she desires to provide her daughter with $25,000 at the end of each year for the next 32 years. If the bank provides a guaranteed account which earns 5.1% per year simple interest, how much money should be deposited into this guaranteed account to fully fund this request? (Answer to the nearest dollar)

2. If you deposit $2,000 at the end of each year into an IRA account that is expected to earn 9% per year simple interest, how much will be in the account in 40 years? (Answer to the nearest dollar)

3.  Suppose you want to buy a house that costs $540,000. You are required to put 10% down, which means the amount to be borrowed is 90% of the price of the house. If you want a 30 year mortgage, and the borrowing rate is 7.4% APR compounded monthly, what would be your monthly payment? (Answer to the nearest penny)

4. Suppose you want to buy a car that costs $43,000. If the dealer is offering 100% financing at 7.2% APR compounded monthly for a 5 year loan, what would be the monthly payment? (Answer to the nearest penny)

Please answer all the question. Thank you!

Answer 1

1. Money to be deposited now =

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