Sally will invest $8,000 per year in a fund that will earn 9% interest, compounded annually. If the first payment occurs one year from today, what will be the balance in the fund 20 years from now?
Doug's 25th birthday is today. To "celebrate," he will begin investing $100 per month, for the next 40 years, into his retirement plan. The first payment begins today, and the account will earn interest at an annual rate of 12%, compounded monthly. How much will Doug have in his retirement account on his 65th birthday?
Baby Claire was born today. Her parents estimate that $100,000 will be needed to pay for her college education, which will begin on her 18th birthday. How much must be invested annually to reach this goal, assuming that the first investment will occur on Claire's first birthday, and that the account will earn an interest rate of 8% (compounded annually)?
John wants to buy a new motorcycle. Unfriendly Finance Co. has agreed to loan him $8,000 for a two-year term at an annual interest rate of 24% (compounded monthly). John would be required to make monthly payments, with the first payment due one month from now. What is the amount of John's monthly payment?
You want to purchase a home, and you know that the maximum monthly payment that you can afford is $900. The loan term will be 30 years, with payments made monthly, beginning one month from now. If the annual interest rate is 6% (compounded monthly), what is the maximum amount that you could borrow today?
The Town of Colfax will need $500,000 six years from today to make street repairs. They will make six annual contributions of $75,000 each into a designated account to fund these repairs, with the first contribution to be made one year from today. What is the minimum rate of interest that must be earned in order to reach this goal?