Asked by Macy

I need help with these few questions on my homework please :)

1. How much money would you need to pay to receive a payout annuity of $8,503.05 annually for 10 years, assuming your money earns 7.5% compounded annually? Assume that your payments increase annually by a 3% COLA.

Answer___ Units___

2.You are purchasing a Yugo SUV for $9500. You have a downpayment of $800, and will finance the rest over 4 years at 9.0 % add-on interest. What is your monthly payment?

Answer___ Units___

3.You buy a car and need to finance $2,419 on a simple-interest amortised loan with 36 monthly payments and an interest rate of 5.2% . Find the monthly payment.

Answer___ Units___


Any help will help, thank you!
Answered by Henry
2. P = Po*r*t/(1-(1+r)^-t)

Po = 9500 - 800 = $8700.

r = (9%/12)/100% = 0.0075 = Monthly %
rate expressed as a decimal.

P = (8700*0.0075*48)/(1-1.0075)^-48 =
$10,392.

P/t = 10,392/48 = $216.50/mo.

3. P = Po + I = Po + Po*r*t.
P = 2419 + 2419*0.052*36 = $2796.36.

P/t = 2796.36/36 = $77.68/mo.


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