1. Your daughter will graduate college in 6 months at which time you will buy her a car for $25,000. How much do you have to invest each month, for 3 months, starting next month (the same amount each month) to have just enough to buy the car in 6 months if your investments earns 3% APR (compounded monthly)?
$8,251
$8,333
No correct answer is given
$8,271
$8,158
2. You have $10,000 you want to give to your grandchild. Rather than give him the full $10,000 today, you invest the $10,000 today in an account that earns 6% APR (compounded monthly). The money in the account will be paid to your grandchild each month, starting next month (the same amount each month) so that the account will be empty in 60 months. How big will the monthly payments be?
No correct answer is given
$841.22
$833.33
$197.51
$193.33