1. After graduating from college with a bachelor of business administration, you begin an ambitious plan to retire in 23.00 years. To build up your retirement fund, you will make quarterly payments into a mutual fund that on average will pay 10.36% APR compounded quarterly. To get you started, a relative gives you a graduation gift of $2,830.00. Once retired, you plan on moving your investment to a money market fund that will pay 6.36% APR with monthly compounding. As a young retiree, you believe you will live for 28.00 more years and will make monthly withdrawals of $10,346.00. (YOUR WITHDRAWALS ARE AT THE BEGINNING OF THE MONTH) To meet your retirement needs, what quarterly payment should you make?
2. A young graduate is planning on saving $689.00 each quarter for four years in an investment account paying 14.76% interest that is compounded quarterly. His first deposit will be made at the end of the next quarter, so this is a regular annuity. In 4 years, he also plans on being able to afford a 60-month car loan with $355.00 monthly payments at a 12.60% APR interest rate. Given the graduate’s plans, how expensive of a “dream car” will he expect to be able to purchase in four years?