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You have saved 4000 for a down payment on a new car the

PV and loan eligibility

You have saved $4,000 for a down payment on a new car. The largest monthly payment you can afford is $350. The loan will have a 10% APR based on end-of-month payments.

What is the most expensive car you could afford if you finance it for 48 months? Round your answer to the nearest cent.

$

What is the most expensive car you could afford if you finance it for 60 months? Round your answer to the nearest cent.

$

Problem 5-30

Reaching a financial goal

Erika and Kitty, who are twins, just received $45,000 each for their 30th birthdays. They both have aspirations to become millionaires. Each plans to make a $5,000 annual contribution to her "early retirement fund" on her birthday, beginning a year from today. Erika opened an account with the Safety First Bond Fund, a mutual fund that invests in high-quality bonds whose investors have earned 8% per year in the past. Kitty invested in the New Issue Bio-Tech Fund, which invests in small, newly issued bio-tech stocks and whose investors have earned an average of 19% per year in the fund's relatively short history.

If Erika's fund earns the same returns in the future as in the past, how old will she be when she becomes a millionaire? Round your answer to two decimal places.

years

If Kitty's fund earns the same returns in the future as in the past, how old will she be when she becomes a millionaire? Round your answer to two decimal places.

years

How large would Erika's annual contributions have to be for her to become a millionaire at the same age as Kitty, assuming their expected returns are realized? Round your answer to the nearest cent.

$

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## Q : Identify at least three objectives for improving the

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