1. Opal Lindsay has just taken out a loan at her bank. The bank is charging her 12 percent compounded monthly. How much is Ms. Lindsay actually paying for her loan?
2. Maria Rosa has invested in a number of consul bonds, which pay her $20,000 in total per year. The applicable interest rate on her bond is 7 percent. She has been offered $300,000 for her bonds. She does not need the cash but is always interested in a good return on investments. Should she sell the bonds?
3. Allie Maxudy wishes to retire in 25 years. She has decided that she should be able to invest $5,000 per year in her retirement fund. If she makes the payments in quarterly installments at the beginning of each year, and can earn an annual percentage rate of 8 percent on her money, how much will she have at the time of her retirement?
4. Sammy and Ruby Loveapet wish to purchase a new car. The car will cost $48,000. Their lender will provide a loan an 11 percent compounded annually, and the loan will be paid off in three annual end-of-year payments over three years. The Loveapet’s will put a downpayment of $5,000 on the auto and wish to know the following:
A. How much are their annual payments?
B. How much will be paid to the lender for interest each year?
C. What will their loan balance be at the end of each year?