1) Harris, a self-employed individual who is 46 years old, is setting up a defined-benefit retirement plan. If he wishes to have $250,000 in this retirement account by age 65, what is the size of each yearly installment he will be required to make into a savings account earning interest at 8.25%/year?
2) The Blakelys borrowed $120,000 from a bank to help finance the purchase of a house. The bank charges interest at a rate of 5.4% per year on the unpaid balance, with interest computations made at the end of each month. The Blakely's have aggreed to repay the loan in equal monthly installments over 30 years. How much should each payment be if the loan is to be amortized at the end of th term?
3) Clarice has leased an auto for 2 years at $450/month. If money is worth 3.5%/year compounded monthly, what is the equivelant cash payment(present value) of this annuity?